What Is a Good Credit Score to Buy a House? 2025 Mortgage Requirements

Buying a home is one of the biggest financial steps you’ll ever take—and your credit score plays a starring role in how that journey unfolds. If you’re wondering what is a good credit score to buy a house in 2025, you’re not alone. Whether you’re a first-time buyer or planning a move-up purchase, understanding how your score affects your mortgage options can help you save thousands over the life of your loan.

Let’s break it down in plain English, just like we would if you stopped by Midwest Mortgage for a coffee and a chat.

Why Your Credit Score Matters When Buying a Home

Lenders use your credit score to evaluate how risky it is to lend you money. A higher score tells them you’ve managed credit well in the past, making you more likely to get approved—and qualify for better rates.

How Lenders Use Your Credit Score

When you apply for a home loan, lenders pull your credit report from the three major bureaus and typically use your middle FICO score to make lending decisions. This number directly influences:

• Your interest rate
• The type of loan you qualify for
• Whether you need to pay for private mortgage insurance (PMI)

The Connection Between Credit Scores and Mortgage Rates

Here’s the reality: A 30-year fixed mortgage at a 760 credit score might come with a 6.25% rate, while the same loan for someone with a 620 score could be closer to 7.75%. That’s not just a small difference—it can mean tens of thousands more over the life of your loan.

Even a 20-point increase in your score could drop your rate by 0.25%, which might save you hundreds every year.

Minimum Credit Score Requirements by Loan Type (2025)

Here’s what you need to know about current 2025 guidelines:

Conventional Loans

• Minimum Score: 620
• Best Rates: 740 and above
• Tip: Higher credit scores often mean lower PMI costs, too.

FHA Loans (Government-backed, great for first-time buyers)

• Minimum Score: 580 (for 3.5% down)
• 500-579: Allowed with at least 10% down

VA Loans (For eligible veterans, active-duty military)

• No official minimum, but most lenders look for 620+

USDA Loans (For rural homebuyers)

• Minimum Score: 640 for automated underwriting

What's Considered a "Good" Credit Score for Mortgages?

• 620–679: Fair – You may qualify, but expect higher rates
• 680–739: Good – Access to competitive mortgage rates
• 740–850: Excellent – Best rates and loan terms available

If you’re aiming to lock in the best deal, that 740+ range is where you want to be.

How Your Credit Score Affects Your Mortgage Rate

Let’s say you’re borrowing $300,000:

• With a 760+ score, your monthly principal & interest could be around $1,847
• With a 620 score, it might be closer to $2,150

That’s a $300+ difference each month—or over $100,000 across a 30-year loan. Wild, right?

Even boosting your score by 20-40 points before applying can make a big impact.

How to Improve Your Credit Score Before Applying

If your credit score isn’t where you want it to be, don’t worry—there are steps you can take:

• Check your credit report for errors (free at AnnualCreditReport.com)
• Pay down credit cards—especially if balances are over 30% of your limit
• Avoid new credit applications in the months leading up to your mortgage
• Set up automatic payments to avoid late fees

Midwest Mortgage's Credit Improvement Strategies

We’ve helped countless buyers improve their credit and qualify for better loans. Our team will walk you through practical steps tailored to your situation—and we won’t sugarcoat things. Just solid advice and a plan.

Alternative Options If Your Score Is Below 620

If your score’s below 620, that doesn’t mean you’re out of luck.

• FHA loans can be a great solution with more lenient credit requirements
• Manual underwriting may be available in some cases
• We’ll look at your full financial picture—not just your credit

Conclusion: Positioning Yourself for Home Buying Success

If you’re thinking about buying a home in 2025, now’s the time to understand where your credit stands. A good credit score to buy a house can unlock better rates, more loan options, and long-term financial peace of mind.

At Midwest Mortgage, we believe there’s a mortgage solution for everyone. Whether your credit is excellent or needs a little love, we’re here to guide you every step of the way.

FAQs

1. Can I buy a house with a 600 credit score?‍

Yes, typically through an FHA loan with at least 10% down, but expect stricter underwriting and higher rates.

2. What’s the fastest way to boost my credit for a mortgage?‍

Pay down credit card balances and check your report for errors. Even a few points can make a big difference.

3. Do mortgage lenders use FICO Score 8 or FICO Score 2?‍

Most lenders use FICO Score 2, 4, and 5—older versions used by mortgage scoring models.

4. Does Midwest Mortgage work with low-credit borrowers?‍

Absolutely. We specialize in helping buyers across all credit levels.

5. How much higher are rates with a 650 vs. 750 score?‍

A 650 score may result in rates 0.5% to 1% higher, which could cost thousands over the life of your loan.

6. Can I get pre-approved with fair credit?‍

Yes! Pre-approval is possible even with a fair credit score. We’ll help you explore your best options.

Ready to see where you stand? Let Midwest Mortgage help you plan your path to homeownership today.