If you’re looking to get a mortgage to buy a home, your credit score matters. A lot. If it’s good, you should be able to get financing without a problem; if it’s bad, you could have a tough time buying a home at all.

Most banks and credit unions need a minimum credit score of 660. Hint: Beam Lending can goes as low as 580 depending on certain situations. Also make sure to check out our 3 Keys to Home Ownership.

How is my credit score calculated?

Your credit scores are calculated based on five key aspects of your financial habits:

  • Payment history (and whether you’ve paid on time): 35%
  • Amount of debt you have: 30%
  • Length of credit history: 15%
  • New credit you’ve taken on: 10%
  • Types of credit you have: 10%


Credit scores range from 300 to 850. Which is why banks and lenders and even credit bureaus break credit scores into ranges:

  • 740 to 850: Best
  • 670 to 739: Good
  • 580 to 669: Low
  • 300 to 579: Subprime


Where you land on the credit-scoring scale says a lot about how good you’ll be at repaying a home loan. That’s why we set minimum credit scores for a mortgage.

How do I find my credit score?

We recommend meeting with your favorite loan officer, they can pull your credit report and make sure things are in order for you to buy a home. You can request a free copy of your credit report online through each of the major credit bureaus—Equifax, Experian, and TransUnion—once a year, but it doesn’t include your credit score.

Once you know your credit scores, you’ll have a good idea of whether you’ll be approved for a mortgage. A minimum credit score of 660 will get you into a home it does not mean you will get the lowest interest rate and lowest over all payment. Getting your score as high as possible will save you thousands over the life of a loan.

What if my credit score is poor?

If you have a credit score under 620 it might be worth taking some steps to raise it. The biggest factor is reducing the amount of debt you owe on your credit cards. Fixing credit is a process, not an overnight fix. Take the steps to fix your credit now and not wait until you are trying to put an offer on a home.

If you don’t have time to boost your credit score into a more acceptable range before buying a home, all is not lost. You may still be able to get a mortgage through a government-backed program like those offered by the Federal Housing Administration. The FHA accepts mortgage applicants with scores as low as 580—and may even go as low as 500 if you can throw down a larger down payment.

Contact us today for a FREE quote. We would love to help answer any questions.

If you are currently under contract on a home or are currently refinancing make sure to visit our Do’s and Don’ts.

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