Yes! Buying A Home With Low Credit Is Possible!

Women in a beautiful garden

If you have bad credit, it may seem like buying a house is out of reach –or at least a couple of years away. But, in reality, struggling credit may not be as much of a roadblock as you may think! 

If you have less than ideal credit and have the goal of buying a home in 2020, then this article is for you! We’ve helped countless homebuying hopefuls reach their dream of buying a home and we can help you too. 

Read on to find out more about loan programs for low-credit home buyers as well as how you can improve your score to qualify for a lower interest rate.


Technically, there isn’t a specific minimum credit score to qualify for a conventional loan. Lenders will set their own requirements since they are the ones that are loaning the funds. As you can imagine, they prefer higher scores as that means less risk.

Government-backed loans work a little differently as they ensure lenders that their funds will be reimbursed should a borrower with low credit default. 

But even then, there are limits as to how low is too low. Generally speaking, a credit score of less than 500 might be too low to get a loan now. If this is you, focus on increasing your score first.


Again, there is no set range but this is the standard most go by:

300-579 Very Poor

580-669 Fair

670-739 Good

740-799 Very Good

800-850 Exceptional


An FHA loan is a government-insured loan. This loan is specifically for first-time homebuyers as well as those that haven’t purchased a home in the past 3 years. The minimum qualifying score is 580. However, if your down payment is at least 10%, you may qualify even if your score is below 500.  

There are additional requirements for getting an FHA loan. But even then, it is still one of the most popular mortgage products for those with struggling credit.  

VA Loans

If you’re an active-duty member of the armed forces or a veteran, then you may qualify for a VA loan. A VA loan is also a government-backed loan, however, it’s funded by the Department of Veterans Affairs. Besides the perk of allowing you to qualify with a lower credit score, you can buy a home with $0 down!

Just like FHA loans, there are requirements for qualifying. Contact us for more details.

USDA Loans

A USDA loan is yet another government-backed loan. However, this one is backed by the U.S. Department of Agriculture.

Just like the previous loans, a USDA is great for home buyers with low credit scores and best if you want to buy a home in a qualifying rural area. It also has a $0 down option! 

Improving A Bad Credit Score Fast

Here are some ideas for improving your credit score fast.

Increase Your Available Credit

Do this by either paying down your balances or requesting a credit limit increase. 

This helps increase your available credit, which is one of the factors that creditors consider when determining your score. 

Just be mindful of which credit card you request the increase from as some companies will do a hard pull on your credit –which can lower your credit score even further. More on this below. 


One of the worst offenses to have on a credit report is a collection. Collections tell lenders that you owed money yet have not attempted to pay it back. You can understand why this would worry potential mortgage lenders. 

Fortunately, there’s a way to fix this –either pay it off or delete it completely. 

If you simply pay it off, it would show on your report as “paid,” which is certainly better than it showing up as outstanding. But an even better plan is to request the credit card company to remove it from your report completely by negotiating.

Ask them to delete the collection in return for making a payment. 

The key to this is to request it before you make any payment or else you’ll lose all your leverage. Also, make sure you get it in writing. 


Too many credit inquiries can lower your credit score too. So while a credit inquiry for an insurance quote won’t affect your score, applying for new credit will. The good thing is that while a hard pull can lower your credit, generally speaking, it should bounce back in a few months –as long as it doesn’t happen too often. 

So when you are looking to qualify for a home loan with struggling credit, the initial credit inquiry shouldn’t be too much to worry about. Just remember that if you do qualify, DO NOT apply for more credit. Any other hard credit inquiries could put you out of the running for a home loan.