What Is The Required Credit Score To Buy a House in 2021?

Figuring out the necessary credit score to buy a house in 2021 is impacted largely by which loan you qualify for. Understanding the different loan types, as well as ways to build up your credit, can help with making an appropriate determination.

Graphic by Iain McKelvey/Data provided by Experian

The credit score one needs to buy a house varies depending on the lender, but generally speaking, most lenders require at least a 620 credit score. The higher your credit score, the better rates you will qualify for in general.

A good way to increase your chances of getting approved for a mortgage is by building up your credit score and improving any negative information on it. This can be accomplished by paying off debt, and avoiding opening new accounts that may have a negative impact on your FICO score.

A recent survey by FICO found that over a third of Americans intend to buy a home in the next five years. This is great news for those who are currently renting and looking to get into their own place, but it can be difficult when your credit score isn't high enough, or you don't have an established history of paying off debt. If your credit score is below 620, you will likely need a co-signer on any loan agreement.

But don't despair! There are still opportunities to get your foot in the door of homeownership through buying a house with no money down, co-buying, or even purchasing one outright at auction. So what does it take to buy a home? 

How Your Credit Score Impacts Your Mortgage Prospects

Experian 2021 State of Credit Report

Many Americans assume that a good credit score is all they need to be approved for their dream home. But there's more to it than just your credit score. Lenders look at many factors before deciding whether or not you're eligible for a mortgage, and the most important one of these is your debt-to-income ratio, which takes into account how much money you make compared to how much money you owe on credit cards and other loans. 

If your debts are too high, lenders will deny your request, no matter what your credit score may be! What does this mean? If you have bad debt but a good income, then don’t bother applying for a home loan because even if you have excellent credit scores, the lender won't approve it.

People with a low credit score are often denied mortgages or given higher interest rates than those with excellent credit scores. It is common for people to want to improve their credit score in order to get better mortgage deals. 

What is the difference between a credit score and a mortgage? If you are planning to buy your first home, it's important to understand how these two things work together. Your credit score will help determine your interest rate as well as what type of loan you qualify for. 

Minimum Credit Score By Mortgage Loan Type

The necessary credit score to buy a house in 2021 varies significantly. If you are looking to purchase a home in the near future, it's important for you to understand these differences so that you can prepare yourself accordingly.

FHA Loan

Minimum Credit Score Required: 580

The Federal Housing Administration (FHA) is a United States government-backed mortgage insurer. The FHA has very specific guidelines for who can get an FHA loan, and those guidelines include minimum credit score requirements. The minimum credit score requirement can vary depending on the type of loan you are applying for.

The FHA loan minimum credit score is a pretty important factor when it comes to qualifying for an FHA loan. You may be wondering what the FHA minimum credit score requirements are.

It's not uncommon for a person to get frustrated with the process of getting an FHA loan because they feel like their credit score is too low and don't understand why. In reality, there are many factors that go into determining your credit score, and while some people may have scores below 620, it doesn't mean you won't be able to qualify for an FHA loan.

The minimum credit score requirement for an FHA home mortgage is 580, but in order to qualify, you will need at least a 10% down payment or equity in your home worth $5,500. 


Minimum Credit Score Required: 640

The USDA loan is a federal government-backed mortgage program that has been around for many years. The minimum credit score requirements to qualify are not as high as other programs, but they do vary depending on where you live. The minimum scores range from 580-640, but you can qualify with a 580 if you have 20% down or 504 if you have 10%. 

To apply for a USDA loan, you have to meet certain requirements. One of the most important is having a credit score that falls at or above 620. This is determined by your FICO score and can be checked through Equifax or Experian, which are two major credit reporting agencies. 

These scores range from 300-850, with a higher number being better. If you aren't sure about your current score or how to find it out, there's also an Equifax Score Watch service available! There are many other factors that go into determining if someone qualifies for a USDA home loan as well such as income, employment history, and debt ratio.

VA Loan

Minimum Credit Score Required: 580

One of the most common VA Loan questions is, "What is the minimum credit score required to qualify for a VA Loan?" The answer varies depending on which type of loan you're applying for. For new construction loans, there are no minimum requirements. 

But if you want to purchase an existing home and be eligible for a VA mortgage, your credit score will need to be higher than what's typically needed for a conventional loan. 

In the past, VA home loans required a minimum credit score of 620. Effective November 3rd, 2017, this requirement has been dropped to 580. This change is welcomed by many who have struggled to qualify for a VA loan in the past but are now able to purchase their dream home with an easier qualification process.

203k Loan

Minimum Credit Score Required: 640

A 203k loan is a type of home improvement loan that does not require the borrower to have good credit. These loans are usually taken out by homeowners who need to make major repairs or upgrades to their homes but don't want to deal with the hassle and risk associated with applying for a conventional mortgage. 

Wondering what your credit score is? The average minimum credit score for a 203k loan is 640. However, the minimum requirements vary from lender to lender. If you're looking for a 203k loan, then it would be worthwhile to speak with a few lenders and find out their requirements first. 

It's important to know if there are any additional loans needed or if you have enough money saved up in order to qualify for this type of mortgage process. Once you've met all of the qualifications, it will be much easier to get started on securing funds!

Conventional Loan

Minimum Credit Score Required: 620

A conventional loan is one of the most common types of mortgage. It is often a good choice for those who are planning to buy a home and need financing because they have little to no money saved up for their down payment but still want to avoid paying too much in interest rates. 

The minimum credit score to qualify for a traditional mortgage loan is 620. If your credit score falls below this level, you may still be able to get financing, but it will more likely come with higher rates and additional fees. 

More Americans are qualifying for conventional mortgages, which typically require a minimum credit score of 620.  The increased demand also signals a shift in how lenders view borrowers' willingness to take on debt. 

Previously, they were hesitant to do so because these loans carry high interest rates and often have strict qualifications, but with the economy improving, this is no longer an issue. It's clear that people are beginning to feel confident again about investing their money into homes for their families.

Jumbo Loan 

Minimum Credit Score Required: 680

A Jumbo Loan is a type of mortgage that exceeds the conforming limit set by Fannie Mae and Freddie Mac. The Federal Housing Finance Agency (FHFA) sets the conforming loan limits for mortgages in the United States, which are currently $484,350 for single-family homes in most areas of the country. These loans provide more flexibility than typical home loans because they can be used to purchase properties with higher prices or buy investment properties. 

Along with greater flexibility comes increased risk: borrowers may have difficulty selling their property if it cannot be refinanced into another conventional loan before its maturity date. Because these loans are considered risky, banks usually charge higher interest rates for them than they would a standard mortgage.

The average credit score for a Jumbo loan is 680. If your credit score falls below that threshold, you may have to pay the jumbo rate on a mortgage. A jumbo mortgage is an expensive option for someone with poor credit, but it might be worth considering if you want to own property in one of the most expensive cities in America.


A credit score is an important measure of your financial health and how likely you are to default on a loan. The higher the credit score, the more likely you are to qualify for loans with favorable interest rates and pay back those loans in a timely manner. According to Experian's State of Credit 2021 Report, the average credit score has increased by 10 points year over year, and people have on average of over $300 less debt than in 2020, and nearly $1000 less debt than in 2019. The required credit score to buy a house in 2021 will depend on what program you look at, and how much money you have to use as a down payment.

Lenders usually look at your entire report when determining your creditworthiness, but they may use different weightings for different items that appear on it. A good rule of thumb is that if you have one bad mark, such as late payments or maxing out a card, then lenders will be less inclined to offer you new lines of credit.

The minimum credit requirement is something you should always be aware of when considering a number of different loans. You will need to have a certain amount of credit in order for the lender to approve your loan, which can make it difficult if you are just starting out with building credit. For more information about credit and loan types, check out Cher's website to talk to a professional, or check out what type of property ownership may be the best fit for you.