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What Credit Score Do You Need To Buy A House?

Tuesday, March 19, 2019   /   by Elissa Tran 2

What Credit Score Do You Need To Buy A House?


What Credit Score Do You Need To Buy A House? | MyKCM



There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!


Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:



    • 16% Very Poor (300-579)

    • 18% Fair (580-669)

    • 21% Good (670-739)

    • 25% Very Good (740-799)

    • 20% Exceptional (800-850)


Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,



Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”


There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640Veterans Affairs (VA) loans have no credit score requirement.


As you can see, none of them are above 700!


It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:What Credit Score Do You Need To Buy A House? | MyKCMAs you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!


One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.


FICO® reported,



Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”


Here is the increase in the average US FICO® Score over the same period of time as the graph earlier.


What Credit Score Do You Need To Buy A House? | MyKCM


Bottom Line


At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream!


  credit score, first time home buyer

My UT Real Estate Group with All American Realty
Staci Powell
3297 W Provost Cir
South Jordan, UT 84096
801-913-2463

Based on information from the Wasatch Front Regional Multiple Listing Service, Inc. as of September 28, 2020. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or the MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information.
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