What Is a Good Credit Score to Buy a House in 2025?

A strong credit score signals to lenders that you manage money well. It also improves your chances of qualifying for a mortgage with favorable terms. Many experts consider a FICO score of 670 or higher “good.” But the market evolves, and homebuyers need to plan for upcoming changes in 2025.

Even a few extra points on your credit score might save you thousands of dollars. We help individuals understand the role of credit when purchasing property. The guidelines below cover why credit scores matter, the current benchmarks, practical steps for improvement, and alternative options if your credit falls below typical standards.

Why a Good Credit Score Is Important

A favorable credit score can make your mortgage more manageable. Lenders see it as a sign that you pay bills on time and keep balances under control. When they trust you, they offer lower interest rates, smaller down payments, or more favorable loan terms.

A 30-year mortgage often goes above $200,000. A small difference in interest rates may cost or save you tens of thousands. A stronger credit score also leads to wider loan choices.

A person who has a credit score in the 700–739 range might get a rate of around 4.5% if that reflects market conditions. Someone with a score above 760 might secure a rate of 4.0%. 

Lender Requirements

Many lenders set minimum thresholds for conventional mortgages. A lender might want a 620 credit score, though some require 640. Jumbo loans for homes over $726,200 (in many areas) often ask for at least 700. High-end properties may involve even stricter policies because the lender sees a higher risk.

Mortgage loan officers also check your employment record, income stability, and debt-to-income ratio. A higher score does not guarantee approval if other factors are weak. However, a good credit score can offset small concerns. 

Some private mortgage insurers impose their own rules. A borrower with a 600 credit score might have a higher premium, even if the lender would allow that score. The insurance company sets additional checks to ensure borrowers are reliable.

How Mortgage Terms Change

A credit score can influence the interest rate, down payment requirement, closing costs, and ability to waive private mortgage insurance. A borrower with a 720 score might obtain a 10% down payment option at a fixed rate, while someone with a 620 score may need 15% down or pay a higher monthly amount due to a higher APR offered.

Longer loan terms, like 30 years, are often considered a benefit offered to people with good credit since the lender spreads the risk. Some banks may also give better discount points to borrowers above a certain score threshold, which lets you pay an upfront fee to reduce your rate. 

In 2025, some lenders will likely adopt updated scoring models like FICO 10 and VantageScore 4.0. These models weigh personal loan balances, late payments, and credit card utilization differently. They might focus more on recent behavior or patterns of debt consolidation. 

Credit Score Benchmarks for 2025

Lenders typically place credit scores into bands. Scores of 580–619 are usually considered subprime, 620–679 are near-prime or average, 680–719 are good, and 720 or higher are excellent. Mortgage eligibility can vary by lender, but these ranges guide general approvals.

Many believe a score of at least 670 is enough for stable mortgage rates. But 720 or above can open doors to premium rates. In 2025, demand for housing may grow if interest rates dip. That could pressure lenders to compete, so they might keep minimum credit thresholds about the same or slightly adjust them if economic conditions change. 

Minimum Ranges for Common Mortgage Loans

Some loan programs are available with fair credit ratings, while others reward higher scores. Here’s what you can expect from different mortgage types:

1. Conventional mortgage loans. These loans often require a score of 620 or higher. Some lenders offer flexible options for people with scores of around 600, but many focus on those with 620–640 ratings to reduce risk.
2. FHA loans. A minimum score is 580 for a 3.5% down payment. Some lenders go below that, but you may need a 10% down payment if your score is under 580. These loans have mortgage insurance premiums (MIP), but MIP might drop after 11 years if you start with at least 10% down.  
3. VA loans. For veterans, active-duty service members, and some National Guard members. Although you pay a funding fee, these often come with no down payment requirements or ongoing mortgage insurance. Lenders may accept a score in the 600 range, depending on the institution’s specific rules.  
4. USDA loans. This mortgages are designed for buyers in certain rural or suburban areas. A 640 score is usually the preferred minimum. These loans require no down payment if you meet location and income limits, but you pay a guarantee fee that acts like mortgage insurance.

Steps to Improve Your Score Before Applying

Depending on your current credit shape, improving your FICO score can take a few months or longer. Some people see results in less than six months, especially if they address negative marks and payment habits. Here are steps you can take to boost your credit.

Check and Correct Your Credit Report

Credit reports often have errors like duplicate entries, misapplied payments, or accounts that aren’t yours. Even a small error can lower your score. Review your file at least once a year to detect issues. A single late payment posted incorrectly might cost 50–100 points. Disputes are handled through each credit bureau’s system. 

Supporting documentation, like proof of payment or corrected statements from a creditor, speeds up the process. Some borrowers get an immediate boost once the credit bureau resolves the mistake. Track changes across the three credit reports from Equifax, Experian, and TransUnion. They can differ if a creditor only reports to one or two bureaus. 

Build a Good Payment Record

Consistent on-time payments have one of the biggest impacts on your score. Even one late payment can stay on your report for up to seven years, though its effect lessens over time. Paying on time for at least 12 months often convinces lenders you’re reliable.

You might set up alerts on your bank’s mobile app to notify you when a credit card statement is due. If you can pay the full balance, do so. If not, pay more than the minimum to lower interest costs and reduce total debt.

Some borrowers add small recurring charges to a single card they can pay off each month. This shows frequent, responsible usage, which can raise your credit score. Secured credit cards may also help you build credit if your credit history is limited. 

Reduce High Balances

Keeping your ratio under 30% often helps your score. If you have a combined credit limit of $10,000, keep the total balance under $3,000. Lower is even better. This shows responsible financial behavior and good money management skills.

If a card’s balance is near its limit, prioritize clearing it first. You might then move to the next highest balance. Some people prefer the “snowball” method, which focuses on clearing the smallest balances. Others use the “avalanche” method, targeting balances with the highest APRs. Either way, lenders look at your total usage.

Don’t open new accounts; avoid increasing too many limits simultaneously. Multiple credit inquiries can badly affect your score, and lenders sometimes see it as a sign you need more debt.

Alternative Options for Lower Scores

Not everyone has 700 points or more. Some deal with medical debts, job interruptions, or prior defaults. Others simply have thin credit files. Still, a score below certain thresholds doesn’t stop you from owning a home. It just means exploring different loan programs or working with a specialized lender. If you fall into the 580–619 range, you might use other options:

Government-Backed Loan Options

The U.S. government insures some mortgages to make housing more affordable. FHA, VA, and USDA loans each cater to different groups, but they all allow lower scores than most conventional products:

If you have past credit blemishes, an FHA loan might fit. VA loans provide better interest rates for eligible borrowers because of the government guarantee. USDA loans suit those who prefer quiet areas and meet moderate income limits.

Special Assistance Programs

Down payment assistance programs exist in many states. Nonprofits and state agencies offer low-interest second mortgages to help you meet closing costs. Credit criteria for these programs vary, but some allow scores around 600–640 if you meet their income requirements.

Large employers sponsor programs, too. They can co-work with local housing authorities to help employees buy homes. Teachers, first responders, and healthcare workers can receive closing cost assistance. Such assistance can suit you even if your score is on the edge.

If you still struggle to qualify, a specialist in credits and housing approved by the U.S. Department of Housing and Urban Development might be helpful. They can outline a plan to raise your score, show you how to track finances, and help you apply for a mortgage. Counseling sessions sometimes cost under $50, and some are free.

Good luck, and find a dream house!