While credit score requirements vary based on loan type, lenders generally require a credit score of at least 620 to buy a house with a conventional mortgage.
The minimum credit score needed to buy a house can range from 500 to 700, but will ultimately depend on the type of mortgage loan youre applying for and your lender. While its possible to get a mortgage with bad credit, you typically need good or exceptional credit to qualify for the best terms.
Read on to learn what credit score youll need to buy a house and how to improve your credit leading up to a mortgage application.
A 725 credit score is considered excellent, putting you in a great position to buy a house and qualify for attractive mortgage rates and terms. With some preparation and smart planning, your path to homeownership with a 725 score can be smooth and successful.
What a Credit Score of 725 Means for Buying a House
A credit score of 725 is well within the “good” to “excellent” credit range that most lenders like to see for mortgage applicants. Here’s what that high score signifies when it comes to getting approved and securing favorable loan terms:
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You’ll likely qualify for the best mortgage rates. Prime borrowers with scores in the high 700s typically qualify for the lowest interest rates from lenders This translates into big savings over the life of your loan
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You can choose from a variety of loan types. FHA, VA USDA conventional – you name it. A 725 score makes you eligible for just about any mortgage program.
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You have bargaining power. With your high score, you can shop around among multiple lenders and negotiate the best possible deal.
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You may qualify for special perks. Some lenders offer incentives like reduced fees or waived origination costs for borrowers with excellent credit.
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You’ll save tens of thousands over the loan term. The higher your credit score, the lower your rate. Compared to a 680 score, you could save $50,000+ over 30 years.
Clearly, a 725 credit score gives you a lot of mortgage strength and flexibility. But remember, credit is just one piece of the puzzle. You’ll also need to meet the lender’s requirements for income, employment, assets, and debts.
Strategies to Keep Your 725 Score Strong
While a score of 725 is excellent, it doesn’t hurt to take steps to keep it as high as possible up until you close on your home loan. Here are some tips:
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Avoid new credit inquiries. Applying for new credit before closing can ding your score a few points. Hold off on new cards.
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Keep credit card balances low. High balances can negatively impact your credit utilization ratio. Pay down cards.
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Continue making payments on time. Payment history is the biggest factor in your credit score. Stay diligent.
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Monitor your credit reports. Verify all information is correct. Dispute errors immediately.
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Don’t close old accounts. Having long, established credit is important. Keep old accounts open.
Sticking to these credit best practices will ensure your 725 score stays put. Small dips can bump you into a lower credit tier and cost you when it comes to mortgage rates.
How a 725 Credit Score Compares
Although scoring models have some differences, a 725 is considered excellent by both FICO and VantageScore standards. Here’s how it stacks up:
FICO
- 800-850 = Exceptional
- 740-799 = Very Good
- 670-739 = Good
- 580-669 = Fair
- 300-579 = Poor
VantageScore
- 750-850 = Excellent
- 700-749 = Good
- 650-699 = Fair
- 550-649 = Poor
- 300-549 = Very Poor
As you can see, a 725 score far exceeds the thresholds for “excellent” credit, giving you prime borrower status in lenders’ eyes.
What’s Next? Prepare for Pre-Approval
Now that you know your 725 score will qualify you for great mortgage rates, it’s time to get the ball rolling on pre-approval. Here are some tips:
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Review your credit reports and correct errors. Accurate credit data is key.
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Gather financial documents. W-2s, paystubs, tax returns, and bank statements.
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Research mortgage lenders. Compare interest rates and fees to find the best fit.
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Interview loan officers. Find an experienced advisor you connect with.
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Formally apply for pre-approval. Confirm you’re ready to buy with a lender.
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Get pre-qualified, too. This early estimate will help guide your home search.
Pre-approval takes your mortgage application to the next level by verifying your financial information. It shows sellers you’re a serious buyer and gives you a confirmed rate and loan amount.
The bottom line is that a 725 credit score gives you a clear path to qualifying for a great mortgage. By continuing to manage your credit wisely and taking the right steps with a lender, you’ll be poised for an easy transition from renter to homeowner.
Pay All Bills on Time
Your debt payment history is the most important factor of your FICO® Score, and even one late payment can do serious damage to your score. If youve had trouble paying on time in the past, try putting your bills on autopay so you never miss a payment. Just be sure you have enough money in your bank account to cover your bills.
Learn more: How to Improve Your Credit Score Fast
Other Factors Mortgage Lenders Consider
Although your credit score is crucial, its just one of many aspects of your creditworthiness. Here are some other factors that lenders will look at to determine your eligibility and loan terms:
- Credit history: Your credit score provides lenders with a quick snapshot of your overall credit health, but it doesnt tell the whole story. Lenders will also review your credit reports for any items that could be red flags, such as a foreclosure or bankruptcy.
- Debt-to-income ratio: Lenders will also calculate your debt-to-income ratio (DTI) by dividing the sum of your monthly debt payments by your gross monthly income. Generally speaking, youll want a DTI below 43%. A ratio thats on the higher end could prevent you from borrowing what you need for your dream home.
- Work history: In addition to your income, home lenders will also consider your work history. For example, if youve been in the same salaried position or industry for a long time, you may have better odds of getting good terms than someone with a spotty job history or who is self-employed with irregular income.
- Down payment: A home down payment is essentially your skin in the game and helps reduce the risk of default. A higher down payment can help make up for a lower credit score and can even qualify you for a lower interest rate. If you put down 20% or more on a conventional loan, you wont have to pay for private mortgage insurance.
- Assets: Lenders may take a look at your assets to evaluate how financially stable you are in general. They may also want you to have some cash reserves in place after your down payment and closing costs.
Can I buy a house with collections on my credit report? Ricardo Mendiola Realtor & Credit Expert
FAQ
Can I get a mortgage with a 725 credit score?
We’ll be with you every step of the way. You could qualify for a low rate with an FHA loan if your credit score is 725, 730, 735, 740, 745, 750, 755, or 760.
What does a 725 credit score get you?
A FICO® Score of 725 provides access to a broad array of loans and credit card products, but increasing your score can increase your odds of approval for an even greater number, at more affordable lending terms.
What credit score is needed to buy a $300,000 house?
What credit score is needed to buy a $300K house? To buy a $300K house, you typically need a credit score of at least 580 for an FHA loan or 620 for a conventional loan. A higher score—around 720 or more—can help you qualify for better interest rates.
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
What credit score do you need for a home loan?
Some loans require a 620 credit score, some require a 540 credit score or no credit score at all. Guild Mortgage will consider applicants who don’t have a FICO credit score by looking at non-traditional credit sources, such as on-time rent, medical or utility bill payments.
Can you get a mortgage with a 620 credit score?
Generally, the higher your credit score, the more likely you’ll qualify for a mortgage loan with these lenders. Many will accept a credit score as low as 620, but they may have other requirements for those borrowers, such as a higher income or a larger down payment.
What is a good credit score to buy a house?
A favorable credit score to buy a house is typically in the high 600s and 700s. Anything higher than that is considered “exceptional”, and helps borrowers get the very best mortgage rates. Certain loan types even allow you to buy a house with a credit score as low as 500.
Is a 725 credit score a good credit score?
A 725 credit score is considered a good credit score by many lenders. “Good” score range identified based on 2023 Credit Karma data. A credit score is a number that lenders use to help assess how risky you might be as a borrower. Credit scores are based on credit reports, which contain information about your credit history.
Do you need a credit score to buy a house?
Your credit score is one of the most important factors when it comes to qualifying for a mortgage—and getting a good interest rate. But the credit score needed to buy a house depends on your lender, where you want to live, and how much you need to borrow. What Credit Score Is Needed To Buy a House?
Can you buy a house with a low credit score?
But if one applicant has a low credit score, you may consider applying for the loan using only the applicant with a healthy credit score. If you omit one applicant’s credit score, you must also omit their income from the application. What is a good credit score to buy a house? A good credit score to buy a house is 720 or higher.