Financing your house with a mortgage probably means you just signed up to repay hundreds of thousands of dollars. For this reason, lenders wont lend to just any borrower. You can expect a lender to closely review your financial health, including your credit score, before giving the stamp of approval. Heres what credit score is needed to buy a house, plus ways you can help improve your chances of qualifying for a mortgage.
Buying a home is an exciting milestone in life. However, your credit score plays a crucial role in determining if you can qualify for a mortgage loan and get approved to buy a house
So what are your chances of buying a home if your credit score is only 350?
While it may be possible to buy a house with a credit score as low as 350, it will be challenging. Lenders view borrowers with scores in the 300s as very high-risk. You’ll have limited options, and any mortgage loan you can get will likely come with unfavorable rates and terms.
How Credit Scores Affect Mortgage Eligibility
Your credit score gives lenders an idea of how reliably you’ve repaid debts in the past. The higher your score, the lower the risk you pose as a borrower.
Here’s a breakdown of credit score ranges and what they generally mean to mortgage lenders:
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Exceptional (800–850): Expect the best rates and loan terms.
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Very Good (740–799): Interest rates will be better than average.
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Good (670–739) You’ll qualify for competitive rates from most lenders.
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Fair (580–669): You may struggle to get approved or have to pay higher rates.
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Poor (350–579): A poor credit score shows you’re a risky borrower, which may make it harder to qualify for a mortgage.
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Very Poor (300–349): It will be very difficult to get approved with a score this low.
So where does a 350 credit score fall? Right at the bottom of the “poor” range. While not impossible, getting approved for a mortgage with this score will be an uphill battle.
Minimum Credit Score Requirements by Loan Type
Each type of mortgage loan program has its own minimum credit score requirements that you’ll generally need to meet:
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Conventional loans: 620 minimum
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FHA loans: 500 minimum
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VA loans: 620 minimum
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USDA loans: 580 minimum
With a 350 score, your only potential option is an FHA loan. FHA loans are insured by the Federal Housing Administration and are more lenient with credit requirements.
However, even FHA loans with minimum scores have caveats:
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FHA loans require a minimum 10% down payment if your credit score is between 500 and 579. With a 350, you’d have to put down at least 10%.
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Many lenders have overlays for FHA loans, meaning they require credit scores even higher than the FHA minimums. A lender may require a 580 to 620 with an FHA loan regardless of the down payment.
This means there’s a good chance even FHA loans will be out of reach with a current score of 350. You’ll have to find a lender willing to underwrite an FHA loan for someone with your score.
Tips for Buying a House With Bad Credit
While buying a home with a 350 credit score won’t be easy, it’s not necessarily impossible if you’re determined and willing to put in extra work. Here are some tips that could help boost your chances:
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Make a large down payment. Putting down 20% or more shows lenders you’re invested. This can help offset a poor credit score.
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Work with a mortgage broker. A broker can shop your loan to multiple lenders to find one that may work with your situation.
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Get a cosigner. Adding someone with good credit as a cosigner can improve your chances. But make sure they realize the risk they’re taking on.
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Improve your credit first. Taking 6 months or more to boost your score before applying can open up better mortgage opportunities.
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Consider loan alternatives. Options like rent-to-own agreements or seller financing may be possibilities if you get denied for a mortgage.
How to Improve Your Credit Score
The higher you can get your credit score before applying for a mortgage, the better. Here are some tips for improving your credit score fast:
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Pay down debts. Lower credit card balances and pay off collections or charge-offs. This can help reduce your credit utilization and improve your payment history.
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Dispute errors. Getting mistakes removed from your credit reports can potentially give your score an immediate boost.
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Become an authorized user. Ask a friend or family member with good credit to add you as a user on their credit card. Their positive history can be added to your reports.
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Limit credit inquiries. Too many new credit applications in a short period can ding your score, so avoid applying for more credit right now.
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Pay on time. Set up autopay if needed and don’t miss payments. Payment history has the biggest impact on your scores.
With time and diligent effort, it may be possible to improve your credit score enough to qualify for an FHA loan within 6 to 12 months. Getting above a 580 would significantly increase your odds of buying a home.
Weigh Your Options Carefully
Buying a house generally makes sense if you plan to stay put for several years. But rushing into homeownership with very bad credit and suboptimal loan terms rarely ends well.
Before attempting to buy a house with a 350 credit score, think carefully and run the numbers:
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How much will your mortgage payment and other ownership costs be?
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Are homes in your area currently affordable if you buy now?
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Can you manage higher monthly payments if rates rise in the future?
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How long would it take to improve your credit and qualify for better loan terms?
While possible, buying a home with a credit score of 350 will be difficult and expensive. In many cases, waiting, improving your credit, and saving up a larger down payment can put you in a much stronger position to get approved and find loan terms that are financially sustainable over the long run.
How to buy a house with a lower credit score
Consider these tips if youre applying for a mortgage without a top-tier score:
Speak with multiple lenders
Shopping around and comparing rates and eligibility requirements can go a long way. One lender might be more accepting of your position and offer a better rate. Be ready to discuss your financials and explain why youd be a good borrower, even with a lower credit score. Having reliable income and a sizable down payment could help your case.
Consider an FHA loan
If you have steady employment, strong income, and a down payment of at least 10%, you might qualify for an FHA loan. Again, these government-backed mortgages have lower credit requirements, but youll have to cover mortgage insurance costs. This can be removed if you put down 10% or more and make on-time payments for 11 years.
Plan to refinance
You might qualify for a mortgage with a lower credit score, but youll likely get a higher interest rate than someone with better credit. When your credit score improves, you could potentially refinance to a better rate and lower monthly payment, though your loan term would restart.
Consider a co-signer
If you cant qualify on your own, you could ask someone close to you to co-sign the mortgage. Youre essentially asking them to vouch for you—and take on the mortgage if you default on your payments. Make sure to keep up with your mortgage payments: Otherwise, youll damage the co-signers credit and your own.
What is a good credit score to buy a house?
A good credit score to buy a house is at least 700, suggests Valiton. “A homeowner can secure solid mortgage terms with a credit score of 700 or higher,” he adds. “740 is typically the score necessary to qualify for the ‘best rate, but there are products and programs out there that will improve interest rates for FICO credit scores above 760 or 780.”
If your credit score is below 700, you might be offered higher interest rates on a loan. Improving your score could help, though. “In some cases, a 10-point improvement to a credit score could lead to a [slightly] lower rate, but it is not guaranteed,” says Valiton, reiterating that a credit score is just one of many factors lenders consider when they decide whether to offer someone a mortgage and with what terms.
Another factor lenders consider is your debt-to-income ratio: Thats your monthly debt obligations divided by your monthly income. Fidelity suggests trying to limit debt payments to 36% of your income.
What credit score do you need to buy a house?
FAQ
Can you get a mortgage with a 350 credit score?
It’s possible to get a mortgage with bad credit, although you’ll probably pay higher interest rates and you may need to come up with a larger deposit.
What credit score is needed for a $250000 house?
What credit score do I need to buy a $250,000 house? You can buy a $250,000 house with a wide range of credit scores, from as low as 500 to as high as 800+.Mar 19, 2025
How can I raise my credit score 100 points in 30 days?
For most people, increasing a credit score by 100 points in a month isn’t going to happen. But if you pay your bills on time, eliminate your consumer debt, don’t run large balances on your cards and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.
What is the lowest credit score to buy a house?
A good credit score to buy a home is one that helps you secure the best mortgage rate and loan conditions for the mortgage you’re applying for. You’ll typically need a credit score of 620 to finance a home purchase. However, some lenders may offer mortgage loans to borrowers with a score as low as 500.