What is the credit score needed to buy a house? | U.S. Bank (2024)

A credit score isn’t the only deciding factor on your mortgage application, but it’s a significant one. So when you’re house shopping, it’s important to know where your credit stands and how to use it to get the best mortgage rate possible.

First, let’s talk about credit scores.

Your credit score (commonly called a FICO® Score) can range from 300 at the low end to 850 at the high end. A score of 740 or above is generally considered very good, but you don’t need that score or above to buy a home. Credit scores are maintained by the national credit bureaus and include debt like credit cards, auto loans or student loans.

Your score is influenced by many factors, but the two biggest are whether you pay your bills on time and how much debt you owe. Having a credit score based on these factors gives lenders a quick way to see if you’re likely to pay your future bills – like your mortgage, for example.

Credit score and mortgages

Though your credit score is a big factor in the mortgage process, it doesn’t necessarily mean that you won’t be able to get a mortgage if you don’t have a great score. Lenders will also consider your income, employment history and debt, along with the amount of the mortgage you’re requesting and your down payment. If lenders review all the information and determine that you are likely to make your mortgage payments in full and on time, you may be able to get better loan terms.

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs). Ourmortgage loan officerscan help you figure out what mortgage options would best fit your situation and lifestyle.

Boosting your credit score

If you have bad credit but are a first-time homebuyer, start maximizing your score before you begin house hunting. Check your credit score so you know where you stand, review your credit history to make sure it’s accurate and remember to consistently pay your bills on time. You cancheck your credit score for free with our toolif you’re a current U.S. Bank client.

When lenders see multiple applications for credit reported in a short period of time, it can discourage them from giving you a loan. So here’s a short list of things to try to avoid when applying for a mortgage so that you can keep your options open.

  • Avoid opening new credit cards.
  • Avoid closing credit cards (since this can also impact your credit score).
  • Avoid applying for new loans.
  • Avoid co-signing on any new loans.

Looking for more ways to improve your credit score? Here are somecredit-boosting tips that can help.

You don’t have to have a top credit score to get a mortgage, but it will help you compete for the house you want by potentially giving you more financing options. So, take steps to try to boost your credit, avoid applying for credit products at the same time you’re house hunting and talk over your options with a mortgage loan officer who can help.

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FAQs

What is the credit score needed to buy a house? | U.S. Bank? ›

Credit score and mortgages

What credit score is needed for U.S. Bank? ›

You need a credit score of at least 750 to get most U.S. Bank credit cards, but the actual credit score requirements vary by card.

What is the minimum credit score to apply for a house? ›

You'll typically need a credit score of 620 to finance a home purchase. However, some lenders may offer mortgage loans to borrowers with scores as low as 500. Whether you qualify for a specific loan type also depends on personal factors like your debt-to-income ratio (DTI), loan-to-value ratio (LTV) and income.

What credit score do you need for a $400000 house? ›

Charge mortgage insurance premiums at a reduced rate. Don't have a pre-set credit score but most lenders require 620+

What credit score do you need to buy a $500 000 house? ›

Conventional loan financing is typically best for borrowers with good or excellent credit because they require a higher credit score than government-backed loans. To secure a conventional loan to buy a house, most lenders typically require a minimum credit score of 620.

Is U.S. Bank hard to get approved for? ›

Some U.S. Bank credit cards are hard to get because they require at least excellent credit, which means you need a credit score of 750+ for good approval odds. Other U.S. Bank credit cards are easier for people with lower credit scores to get approved for, so it's important to choose wisely.

Can I buy a house with a 580 credit score? ›

FHA loans. The Federal Housing Administration (FHA) insures FHA loans, which allows mortgage lenders to accept a credit score as low as 580 with a 3.5 percent down payment, or 500 with a 10 percent down payment.

What credit score do I need to buy a $250000 house? ›

To qualify for a conventional loan, you'll need a credit score of at least 620, though some lenders may choose to approve conventional mortgage applications only for borrowers with credit scores of 680 and up.

How much can I borrow with a 580 credit score? ›

You can borrow anywhere from a few thousand dollars to $100,000+ with a 580 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.

What credit score is needed for FHA loan? ›

To qualify for an FHA-insured loan, you need a minimum credit score of 580 for a loan with a 3.5% down payment, and a minimum score of 500 with 10% down. However, many FHA lenders require credit scores of at least 620.

How much do you have to make a year to afford a $200 000 house? ›

Assuming you have enough in savings to cover the down payment, closing costs and cost of regular upkeep, yes, you probably could afford a $200K home on a $50K annual salary. Using our example above, the monthly mortgage payment on a $200K home, including taxes and insurance, would be about $1,300.

How much income do you need to buy a $250000 house? ›

The 2.5 times your income rule

Based on this rule, you would need to earn $100,000 per year to comfortably purchase a $250,000 home.

How much is a downpayment on a 200K house? ›

Conventional mortgages, like the traditional 30-year fixed rate mortgage, usually require at least a 5% down payment. If you're buying a home for $200,000, in this case, you'll need $10,000 to secure a home loan.

How much income do I need for a 300K mortgage? ›

How much do I need to make to buy a $300K house? To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate.

How much income to afford a 500K house? ›

In today's climate, the income required to purchase a $500,000 home varies greatly based on personal finances, down payment amount, and interest rate. However, assuming a market rate of 7% and a 10% down payment, your household income would need to be about $128,000 to afford a $500,000 home.

How much house can I afford if I make $70,000 a year? ›

Generally, it's recommended to spend between 25% to 33% of your gross monthly income on housing. For a $70,000 salary, this translates to a monthly mortgage payment of approximately $1,450 to $2,000. However, the exact amount can vary based on your personal circ*mstances and the type of loan you choose.

What's the easiest U.S. Bank credit card to get? ›

The U.S. Bank Cash+® Visa® Secured Card is easy to get, even with poor credit or no credit, because it is a secured credit card and requires an upfront deposit.

What are the requirements for U.S. Bank? ›

Your Social Security number. A valid, government-issued photo ID like a driver's license, passport or state or military ID. A minimum opening deposit of $25 to activate your account (once you've been approved).

Does U.S. Bank check your credit score? ›

No. You can monitor your credit score as closely as you like without taking a “hit” to your credit. The VantageScore credit score provided in U.S. Bank mobile and online banking is for educational purposes only and is not used by U.S. Bank to make credit decisions.

Does U.S. Bank have pre approval? ›

When dealerships participate in the U.S. Bank auto financing program, they can accept your pre-approval letter to streamline your financing.

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