Having a high credit score has plenty of perks. Higher credit limits and lower interest rates for loans and credit cards are among the many reasons people try to improve their credit. But what if your score is on the lower end of the spectrum? A 600 credit score is less than ideal, but will it shut you out of the housing market entirely? Let’s explore whether you can buy a house with that score and what loan options may be available.
Can I buy a house with a 600 credit score?
To answer the question, yes, you can buy a house with a 600 credit score. Lenders don’t just look at your credit; they also consider your income, employment history, debt-to-income ratio, and your ability to make consistent mortgage payments. If you can provide evidence of a steady source of income and can demonstrate that you can afford to make regular mortgage payments, you have a chance of getting approved.
The key is finding a loan program that you qualify for and that fits your needs. With the right preparation and loan type, homeownership is still within reach.
What credit score do I need to buy a house?
The credit score you need to qualify for a home loan will depend largely on the loan program itself. Each loan type has its own set of requirements and thresholds you have to meet in order to qualify. In the table below, we’ll break down some of the most common types of loans and the credit scores you’ll need to qualify.
| Loan type | Minimum credit score |
| Conventional | 620 |
| FHA loan | 500 (with 10% down) or 580 (with 3.5% down) |
| VA loan | No official minimum (most lenders prefer 620) |
| USDA loan | No official minimum (typically 620+) |
FHA loans
FHA loans are one of the most popular options for buyers with lower credit scores. To qualify, you’ll need a score of at least 580 with a 3.5% down payment, or as low as 500 if you can put down 10% or more.This loan type is also intended for first-time homebuyers.
VA loans
If you’re looking to get a VA loan, you must be a veteran or active service member. While the VA itself doesn’t impose a minimum credit score, the lenders they work with may have their own policies, and in many cases will require a score of at least 620.
USDA loans
Low to moderate-income borrowers in rural areas are the intended beneficiaries of USDA loans. Your household’s adjusted gross income must be less than 115% of the median gross income in your area. While you usually need a credit score of at least 620 to qualify, it’s possible to get approved with a lower score.
How does my credit score impact my ability to buy a house?
A high credit score signals to lenders that you are a responsible borrower who can pay off debts on time. A higher score suggests you’re a responsible borrower who pays debts on time, which often results in lower interest rates and better loan terms.
On the other hand, a lower credit score, like 600, makes you a riskier bet for lenders. To offset that risk, lenders may charge higher interest rates, which can increase your monthly payment and the total cost of your loan.
What loans can you get with a 600 credit score?
As the table above illustrates, a conventional loan will be hard to come by with a 600 credit score, but that doesn’t mean that the dream of buying a house is out of reach. The FHA, VA, and USDA loans are all very much within range for a borrower with a 600 credit score.
Non-QM loans, which typically cater to borrowers who don’t meet the requirements for traditional loans, are another option for those with lower credit scores. Keep in mind that these loans tend to have higher minimum down payments and interest rates.
FAQ about buying a home with a 600 credit score
Is 600 a good credit score?
A 600 credit score falls in the “fair” range. It’s not considered good, but it’s also not the worst – you still have options for getting a mortgage.
What is considered to be a good credit score?
A “good” score is anything between 670 and 739. Scores within this range will get you lower mortgage rates.
Can I buy a house with bad credit?
While it might prove to be a little more difficult, buying a house with bad credit isn’t impossible. There are several loan programs that cater to borrowers with lower credit scores, though they do come with higher mortgage rates.