What is the minimum credit score for a mortgage?

The absolute minimum is 500 for an FHA loan with 10% down payment. With a 580+ score, you can get FHA with only 3.5% down. Conventional loans typically require 620+. Some portfolio lenders may work with lower scores but charge much higher rates.

Can I buy a house with a 580 credit score?

Yes, FHA loans allow borrowers with 580+ scores to purchase with as little as 3.5% down. You will pay a higher interest rate than someone with a 740 score, and FHA mortgage insurance premium is required, but homeownership is achievable.

How long after bankruptcy can I get a mortgage?

For FHA loans, the waiting period is 2 years after a Chapter 7 bankruptcy discharge. For conventional loans, it is typically 4 years. Chapter 13 bankruptcy allows FHA applications after 12 months of on-time plan payments with court approval.

Should I wait to improve my credit before buying?

If your score is below 580, waiting 3-6 months to improve it is usually worth it. The rate savings from even a 40-point improvement can save you tens of thousands over the life of the loan. However, if prices are rising rapidly in your area, the cost of waiting could offset the rate savings.

Bad Credit Mortgage Options: How to Get a Mortgage With Lower Credit

A less-than-perfect credit score does not mean homeownership is out of reach. Learn about loan programs for credit scores from 500-619 and strategies to improve your chances.

Mortgage Options by Credit Score

Score Range	Loan Options	Down Payment	Rate Impact
580-619	FHA	3.5%	+0.75-1.25% vs 740+ score
500-579	FHA only	10% required	+1.25-1.75% vs 740+ score
620-659	FHA, some Conventional	3-3.5%	+0.50-1.00%
Below 500	Very limited — portfolio lenders	20%+ typical	+2.00%+

FHA: The Best Option for Lower Credit

FHA loans are specifically designed to be accessible to borrowers with lower credit scores. With a 580 score, you can put down just 3.5%. Even scores as low as 500 are eligible with 10% down. FHA also has more flexible DTI ratios, typically allowing up to 43-50%.

Manual Underwriting

If your credit score is borderline, ask about manual underwriting. A human underwriter reviews your full financial picture — steady job history, rent payments, and savings can compensate for a lower score.

Non-Traditional Credit

FHA allows non-traditional credit history — 12 months of on-time rent, utility, and insurance payments can substitute for a traditional credit score.

Compensating Factors

Large cash reserves (3-6 months of payments saved), low DTI ratio, or long employment history can offset credit concerns and strengthen your application.

How to Improve Your Score Before Applying

Even a few months of focused credit improvement can make a huge difference. Improving from 580 to 640 can save you 0.50-0.75% on your rate — that is $100+/month on a $300K loan. See our full credit score guide for detailed strategies.

Quick Credit Improvement Steps

Pay down credit card balances to below 30% utilization (fastest score boost)
Dispute errors on your credit report — mistakes are found on 1 in 5 reports
Do not close old accounts or open new ones before applying
Set up autopay to prevent any new late payments
Consider a rapid rescore — your lender can request updated scores after paying down balances

What to Avoid

Red Flags for Bad Credit Borrowers

Rent-to-own schemes — these often favor the seller and can leave you worse off
Hard money loans — extremely high rates (10-18%) meant for investors, not homebuyers
Predatory lenders — if a lender says credit score does not matter at all, be very cautious
Paying for credit repair — you can dispute errors and improve credit yourself for free

Check today's FHA rates or use our FHA calculator to estimate payments. Use our DTI calculator to see if your debt ratios qualify.

How to Get a Mortgage With Bad Credit