It’s easy to fall in love with the idea of owning a home—imagining the backyard barbecues, a cozy reading nook, or simply the joy of painting your walls any color you want. But before those dreams can take shape, most buyers will need to face the very real challenge of qualifying for a mortgage. And at the heart of that challenge lies one crucial number: your credit score.
Your credit score, often referred to as a FICO score, is essentially a three-digit summary of how reliably you've handled borrowed money in the past. Lenders use it to assess the risk of lending to you. A higher score indicates to lenders that you’re likely to pay your mortgage on time, while a lower score raises red flags. If you're thinking about buying a home, improving this score should be one of your first steps. For many buyers, it's the difference between getting approved—or not—and it also affects how much interest you'll pay over the life of your loan.
Take Sarah, for instance. A teacher in her early 30s, she had always paid her bills, but a few missed payments during grad school had quietly pulled her score down to the low 600s. She didn’t think much of it until she started house hunting and realized she wouldn’t qualify for the interest rate she expected. By reviewing her credit reports and making some strategic changes, she raised her score over 650 in six months, opening doors to better loan options and lower monthly payments.
In the U.S., there are three major credit bureaus—Experian, Equifax, and TransUnion. Each generates its own version of your score based on slightly different data. For example, Experian might give more weight to on-time rent payments, while TransUnion could include employment history details. These scores should be relatively close, but it’s still a good idea to check all three. A good starting point is AnnualCreditReport.com, where you can request a free copy of your credit report from each bureau once every 12 months. It won’t show your score for free, but it will give you a detailed history that you can review for accuracy. Some credit card companies now offer free access to your score as well, making it easier to keep tabs on your credit health.
Once you have your reports in hand, go through them carefully—especially the “adverse accounts” section that shows missed payments, defaults, and other red marks. According to a 2021 Consumer Reports study, over a third of Americans found at least one error in their credit report. If you’re like Tom, a young graphic designer who discovered a medical bill from a clinic he’d never even visited, you might be surprised by what you find. In Tom’s case, it turned out to be a clerical error, but it took several weeks and a few phone calls to get it removed. Once corrected, his score jumped nearly 40 points.
If your score is suffering from past mistakes, the good news is that there are steps you can take to repair it. If a late payment is weighing you down, you may be able to have it removed. Many companies are surprisingly willing to forgive one-time errors—especially if you’ve been a reliable customer overall. Jenny, a freelance writer, forgot to pay her credit card bill while traveling abroad. When she explained her situation to her card issuer, they agreed to strike the late payment from her record. It took one phone call and a little patience, but her credit score recovered quickly.
Another strategy is to improve your debt-to-credit ratio, which compares how much you owe to your total credit limit. Even if you can’t pay off large balances right away, you can ask your credit card company to raise your credit limit. This is a trick financial advisors often recommend. Suppose you're carrying $1,000 in credit card debt. If your limit is only $1,500, that’s a high utilization rate—something that drags down your score. But if your limit jumps to $5,000, that same $1,000 now represents a much smaller slice of your available credit, and lenders will see that in a better light.
One of the simplest but most powerful tools in your credit-repair kit is also the most obvious: pay your bills on time. Payment history makes up 35% of your credit score, so every on-time payment helps. For someone like Marcus, a busy father of three juggling work and evening classes, this used to be a struggle. But once he set up automatic payments on all his accounts, he didn’t miss a single bill—and his score began to steadily climb.
Of course, even with your best efforts, time plays a role. Negative marks like late payments or collections can stay on your report for up to seven years. But every day you make good financial choices, you’re slowly rewriting your credit story. Starting early gives you the best chance of walking into the home-buying process with confidence—and bargaining power.
Different loan types require different credit score thresholds, and knowing these benchmarks can help you set realistic goals. For conventional loans, a score of 620 is generally the minimum, though many lenders prefer 660 or higher. These loans offer more flexibility in property type—ideal for buying a second home or investment property—but they’re less forgiving if your credit is shaky.
If you’re considering a jumbo loan—often used for more expensive properties—you’ll need an even higher score, typically 700 or above. These loans aren’t backed by government programs and carry more risk for lenders, so standards are tighter.
FHA loans, insured by the Federal Housing Administration, offer more accessible terms. If your credit score is between 500 and 579, you’ll need a 10% down payment. With a score of 580 or higher, you can put down as little as 3.5%. This is why FHA loans are popular among first-time buyers like Alex and Maria, a young couple who managed to buy their first condo with a modest down payment, even though their scores weren’t stellar.
VA loans, backed by the Department of Veterans Affairs, don’t officially require a minimum credit score, but most lenders look for at least 620. These are a lifeline for eligible veterans and active-duty service members. Take Michael, a retired Marine who had a patchy credit history due to frequent deployments. Thanks to the VA program’s leniency and the absence of a down payment requirement, he and his wife were able to buy a home near their grandkids without emptying their savings.
Lastly, USDA loans—geared toward low-to-moderate income buyers in rural areas—require a credit score between 580 and 640 in most cases. Emily, a social worker who relocated to a quiet farming town, found this program especially helpful when she was just starting her career and didn’t have much saved.
Buying a home is one of life’s biggest decisions, and your credit score plays a central role in shaping what’s possible. By taking the time to understand it, monitor it, and improve it, you’re not just boosting a number—you’re laying the foundation for financial stability and future success. So whether you're dreaming of a cozy cottage, a modern loft, or a house with a backyard for your dog, start working on your credit today. Your future self—and your future home—will thank you.