Finances (US)

What credit score do you need to buy a house?

Do you know the minimum credit score to buy a house? Check out the suitable punctuation to achieve your dream and learn how to get there!

Advertisement

by Aline Augusto

Published on 07/20/2022
Learn the minimum score you must have to buy a house and how to get there! Source: Canva.
Learn the minimum score you must have to buy a house and how to get there! Source: Canva.

What credit score do you need to buy a house? Buying a house is a big step. Unfortunately, very few can buy a home in cash or save enough money over several years to do it without needing a loan.

Fortunately, there are ways you can achieve your dream without waiting a long time. But, you must know you will probably have to show a good financial path to the financial institution which will lend the funds.

Oportun Personal Loans screenshot

How to apply for Oportun Personal Loans?

If you need quick funds to cover unexpected expenses, learn how to apply for an Oportun Personal Loan.

One of the factors that affect whether you will get the funds you need or not is your credit score. So, what minimum credit score do you need to buy the house you want? What is the least punctuation recommended for you to get a loan? Keep reading to learn all about it and take advantage of the tips we have prepared for you to increase your credit worthiness. 

Advertisement

Is 580 a good credit score to buy a house? 

Before telling the answer to this question, let’s just do a review of credit scores. A credit score works as a numeral expression of a person’s financial health.

It ranges from 300 to 850. The higher the punctuation is, the better the credit history and financial health of a person.

Basically, those numbers show how responsible you are with your finances. And that’s why financial institutions base their credit decisions on credit scores.

Of course, it is not the only item that affects those decisions. But, it is an important one.

Usually, if you want to buy a house, you go after a loan or mortgage. Also, it is essential to understand how to plan and work on a housing budget.

Whether you get the funds you need to achieve your dream or not, you must have been saving for a down payment before shopping for a mortgage or hiring a real estate agent to choose your future home.

Furthermore, no matter your credit score, you must consider the after situation. Securing your financing installments is crucial for you not to enter into critical debt. 

No further ado. Is 580 a good credit score to buy a house? Yes and no! It all depends on which type of loan or mortgage you want to apply for.

Most of the time, conventional loans don’t accept credit scores lower than 620. It doesn’t mean you won’t find a loan that considers fair or bad credit. But, you will probably pay higher interest and fees if you don’t manage to have a good score to apply for a conventional loan.

On the other hand, FHA loans have fewer minimum requirements when it comes to credit scores. Typically, the Federal Housing Administration recommends a minimum of 580, which means you can apply for a mortgage even if you have a bad or fair credit score.

However, note that the higher your credit score is, the better conditions you will get.

At the same time, there are other types of loans you may apply for depending on your situation and goal, including VA loans and USDA loans, which require credit scores ranging from 580 to 640.

What kind of loans can you get with 580?

Learn more about credit score to buy a house. Source: Canva.
Learn more about credit score to buy a house. Source: Canva.

Having a 580 credit score means you have bad credit. It is not so bad, but it isn’t good. You will probably find many conventional loan options on the market that considers this kind of score, but at the same time, you will probably get higher interest rates with less flexible terms.

There are government-backed mortgage options for those with less than perfect credit scores and little money for a down payment. Also, there are options for veterans and those who plan to live in suburban or rural areas, who also have poor credit scores and low income.

How to increase your credit score?

In order to get better terms and conditions, it is recommended that you improve your financial health before applying for a loan or mortgage, no matter which lender you choose. 

It is challenging to increase a score, but it isn’t impossible. Check out the following tips we have prepared for you!

Manage your bills and pay them on time

The first tip is the most important one. If you want to improve your credit score, you need to pay attention to your bills.

Set up the payments to pay them earlier. Organize your finances so you avoid interest and work on your payment history.

This will show the whole market that you are a good consumer, a responsible person, and a possible great borrower. 

Negotiate debt 

Let’s suppose you have debt; how to improve your credit score then? Negotiate your debt. The market sees it as a good thing since you will figure out how to solve your problems.

But, make sure you will be able to pay the debt after negotiating it. 

Don’t apply for multiple credit cards and lines of credit

Besides the fact that every time you apply for a credit card, the process impacts your credit score, applying for multiple credit options shows the market you have no control over.

So, before deciding to have many cards in your wallet, make sure you know what your credit score is, and most importantly, be sure you can handle them.

Choose a credit card that helps you build or rebuild your credit score

Many credit cards actually help you build a credit history if you choose one correctly and use it responsibly.

Remember that you should choose a card with low or zero fees first. Then, it would be great if the card gave you something extra, like cash back.

Also, be aware of the APR. And, finally, use it in a responsible way. See below the application process for the Revvi card. This is a product that can help you improve your credit score with good use.

Mão segurando cartão Revvi

How to apply for a Revvi Card?

The Revvi Card offers 1% cash back rewards^^, and it doesn’t require a perfect credit score. Check out how to apply for it right now!

About the author

Aline Augusto

My name is Aline Mesquita; I'm a writer here on the blog, where I write about finance in general and other subjects. I have been working with content creation for ten years. Also, I'm post-graduated in Project Management, with expertise in SEO practices. Currently, I am studying finance, market trends, and cryptocurrencies.

Reviewed by

Aline Barbosa

Senior Editor

Trending Topics

content

How to apply for a Wyndham Rewards Earner® Business Card?

Check out how to apply for a fantastic Wyndham Rewards Earner® Business Card and enjoy the exclusive perks and rewards you can get with it!

Keep Reading
content

How to buy and make money online with Bitcoin?

If you want to participate in this digital currency world, read this article to learn how to buy Bitcoin, receive, store, spend, and more!

Keep Reading
content

Learn all about what Chapter 7 bankruptcy is!

Are you filing for bankruptcy? If so, you should learn about what Chapter 7 bankruptcy is and how to deal with your finances! So, read on!

Keep Reading

You may also like

content

Chase Sapphire Reserve® application: how does it work?

Unlock the secrets to getting Chase Sapphire Reserve® - keep reading and find out how to apply! Plus, find out the multiple perks this card offer.

Keep Reading
content

Application for the Luxury Gold card: how does it work?

If you need some extra luxury in your life, this card is for you. Consider applying for the Luxury Gold card and get the VIP experience you deserve. This article will show you how to get one.

Keep Reading
content

Deserve® EDU Mastercard for Students application: how does it work?

The Deserve® EDU Mastercard for Students comes with a range of benefits that can help you manage your finances and build your credit history. In this post, we'll tell you how to apply for it. Keep reading to learn more!

Keep Reading