What is a Good First Time Home Buyer Credit Score? | Equifax (2024)


  • Credit scores are one factor mortgage lenders consider when evaluating you for a loan. Lenders also use your credit scores to help set your interest rate and other loan terms.
  • Most conventional mortgages require first-time homebuyers to have a minimum credit score of 620 for approval.
  • First-time homebuyers whose credit scores don't hit the standard minimum may still be able to qualify for a mortgage through FHA, VA or USDA programs.

The stakes are high for first-time homebuyers applying for a mortgage. It’s only natural to wonder how your credit scores will impact your mortgage application.

Here’s what to know about minimum credit score requirements as a first-time homebuyer.

How do my credit scores affect my chances of getting a home loan?

Credit scores are three-digit numbers, typically between 300 and 850, that reflect your past behavior as a borrower. They are designed to indicate your creditworthiness, or the likelihood you will pay your bills on time.

Mortgage lenders consider credit scores as one factor when evaluating you for a loan. Along with other factors, such as your income, your credit scores can also affect the amount of money you qualify for.

There's no magic number that guarantees you’ll be approved for a mortgage. But, generally speaking, higher credit scores increase your chances of securing a loan.

Once you’re approved for a mortgage, your lender uses your credit scores to help set your interest rate and other loan terms. Generally, lenders offer the lowest interest rates and best terms to the lowest-risk borrowers.

Is there a minimum credit score for first-time homebuyers?

Credit score requirements vary from lender to lender. However, for most conventional mortgages, homebuyers need a minimum credit score of 620 for approval. If your score is below this benchmark, you are unlikely to qualify for a conventional loan.

Are there home loans available for first-time homebuyers with low credit scores?

Luckily, options exist for first-time homebuyers whose credit scores fall below 620. Certain first-time homebuyers may qualify for special government-sponsored loans with more lenient approval requirements.

  • FHA loans from the Federal Housing Administration are aimed at low- to moderate- income homebuyers who may not be able to afford conventional loans. FHA loans typically require a credit score of 580 for approval, provided you can commit to a 3.5% down payment. However, if you can afford a 10% down payment, you may qualify for an FHA mortgage with a credit score as low as 500.

    FHA loans require borrowers to pay for mortgage insurance. Mortgage insurance premiums help to reimburse the lender if the borrower defaults on their loan.

  • VA loans from the U.S. Department of Veterans Affairs may be available for certain homebuyers who served in the U.S. military. There is no standard minimum credit score for VA loans, and credit score requirements vary from lender to lender.
  • USDA loans from the U.S. Department of Agriculture may be available for low- to moderate- income homebuyers who are looking to purchase property in select rural areas. Like VA loans, the minimum required credit score for USDA loans varies by lender.

How can first-time homebuyers improve their credit scores?

Low credit scores don’t have to stand in the way of homeownership for first-time homebuyers. Even a little effort toward improving your credit scores can go a long way.

Before you begin house hunting, try setting a budget and making consistent, on-time payments on any outstanding debt. Although you’ll need to focus most of your attention on improving your payment history, don’t overlook the other factors used to determine your credit scores, such as:

  • How much debt you owe
  • The length of your credit history
  • Your credit mix
  • The age of your credit accounts

It’s also important to regularly review your credit reports and credit scores as you work to improve your credit history.

What is a Good First Time Home Buyer Credit Score? | Equifax (2024)
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