What is the credit score needed to buy a house? | U.S. Bank (2024)

A credit score isn’t the only deciding factor on your mortgage application, but it’s a significant one. So when you’re house shopping, it’s important to know where your credit stands and how to use it to get the best mortgage rate possible.

First, let’s talk about credit scores.

Your credit score (commonly called a FICO® Score) can range from 300 at the low end to 850 at the high end. A score of 740 or above is generally considered very good, but you don’t need that score or above to buy a home. Credit scores are maintained by the national credit bureaus and include debt like credit cards, auto loans or student loans.

Your score is influenced by many factors, but the two biggest are whether you pay your bills on time and how much debt you owe. Having a credit score based on these factors gives lenders a quick way to see if you’re likely to pay your future bills – like your mortgage, for example.

Credit score and mortgages

Though your credit score is a big factor in the mortgage process, it doesn’t necessarily mean that you won’t be able to get a mortgage if you don’t have a great score. Lenders will also consider your income, employment history and debt, along with the amount of the mortgage you’re requesting and your down payment. If lenders review all the information and determine that you are likely to make your mortgage payments in full and on time, you may be able to get better loan terms.

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs). Ourmortgage loan officerscan help you figure out what mortgage options would best fit your situation and lifestyle.

Boosting your credit score

If you have bad credit but are a first-time homebuyer, start maximizing your score before you begin house hunting. Check your credit score so you know where you stand, review your credit history to make sure it’s accurate and remember to consistently pay your bills on time. You cancheck your credit score for free with our toolif you’re a current U.S. Bank client.

When lenders see multiple applications for credit reported in a short period of time, it can discourage them from giving you a loan. So here’s a short list of things to try to avoid when applying for a mortgage so that you can keep your options open.

  • Avoid opening new credit cards.
  • Avoid closing credit cards (since this can also impact your credit score).
  • Avoid applying for new loans.
  • Avoid co-signing on any new loans.

Looking for more ways to improve your credit score? Here are somecredit-boosting tips that can help.

You don’t have to have a top credit score to get a mortgage, but it will help you compete for the house you want by potentially giving you more financing options. So, take steps to try to boost your credit, avoid applying for credit products at the same time you’re house hunting and talk over your options with a mortgage loan officer who can help.

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FAQs

What is the credit score needed to buy a house? | U.S. Bank? ›

Credit score and mortgages

What is the minimum credit score for U.S. Bank? ›

You need a FICO® Score of 670 or higher for most U.S. Bank credit cards, but its secured credit cards don't have a minimum credit score.

What score does the U.S. Bank use? ›

The credit score you see in U.S. Bank mobile and online banking is a unique score derived from the VantageScore 3.0 model to help you understand your creditworthiness. The model incorporates the same data considered by the three main credit reporting companies (TransUnion, Equifax and Experian).

What credit score is needed to buy a $300K house? ›

What credit score is needed to buy a $300K house? The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of loan. For an FHA loan, the minimum credit score is usually around 580.

What credit score do you need for a $250000 mortgage? ›

To qualify for a conventional loan, you'll need a credit score of at least 620, though some lenders may choose to approve conventional mortgage applications only for borrowers with credit scores of 680 and up.

Is U.S. Bank hard to get approved for? ›

You need a credit score of at least 750 to get most U.S. Bank credit cards, but the actual credit score requirements vary by card.

Can I buy a house with a 580 credit score? ›

You can get a mortgage with a credit score as low as 620, 580 or even 500, depending on the type of loan. Some mortgage lenders offer bad credit loans with more flexible qualifying requirements but higher costs. Others offer free credit counseling to help you improve your score before applying for a loan.

Does U.S. Bank give instant approval? ›

Does U.S. Bank Give Instant Approval? Yes, U.S. Bank credit cards may give instant approval when you apply for one of their cards online, though getting approved for an account immediately is never guaranteed.

Does the U.S. Bank have pre-approval? ›

Save time when you line up your financing first.

With an auto financing pre-approval, you'll know how much you can spend so you can shop with confidence. Then, when you find the right car, simply take your pre-approval to any participating dealership. Shopping for a Tesla? Start here.

Can I afford a 300K house on a 40k salary? ›

To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific annual salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate. Homeownership costs like HOA fees can also impact affordability.

How much is a 20% down payment on a $350 000 house? ›

To make a 20% down payment on a property with a $350,000 mortgage, you would need $87,500. Many buyers make lower down payments, however. Some as low as 3%.

How much is a 20% down payment on a $300 000 house? ›

A 20% down payment on a $300,000 house is a common preference for most mortgage lenders. Most mortgage lenders favor a $60,000 down payment for a $300,000 home because the risk when the homebuyer defaults on the monthly mortgage payments is lower. Homebuyers also benefit from a 20% down payment.

What salary do you need for $250000 mortgage? ›

If a borrower has no other debt obligations, a conforming loan for a $250,000 property with 10% down in a 7% rate environment would require a gross monthly income of approximately $3,870, factoring in a 50% debt ratio.

How much would a $250,000 mortgage cost per month? ›

Monthly payments for a $250,000 mortgage

Your monthly payment will depend on your interest rate and loan term — or how long your loan lasts. On a $250,000 fixed-rate mortgage with an annual percentage rate (APR) of 6%, you'd pay $1,498.88 per month for a 30-year term or $2,109.64 for a 15-year one.

What FICO score is used to buy a house? ›

While most lenders use the FICO Score 8, mortgage lenders use the following scores: Experian: FICO Score 2, or Fair Isaac Risk Model v2. Equifax: FICO Score 5, or Equifax Beacon 5. TransUnion: FICO Score 4, or TransUnion FICO Risk Score 04.

Does U.S. Bank do a hard credit pull? ›

Chip Lupo, Credit Card Writer

The hard inquiry allows U.S. Bank to determine your credit risk and ultimately decide whether you'll be approved for an account. U.S. Bank credit cards require bad to excellent credit to be approved.

What credit score do you need for a U.S. Bank secured credit card? ›

That means people with credit scores below 640 have a shot at getting approved for the U.S. Bank Secured Visa® Card. Secured cards are easier to get than unsecured cards because they require a deposit to open the account, which U.S. Bank will use as collateral to secure the account.

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