Don't Have Perfect Credit? Don't count yourself out

Do I Need Perfect Credit to Buy a Home?

Question of the Day

Short answer: No. You do not need perfect credit to buy a home — just like you don’t need a perfect credit score to qualify, you also don’t need a 20% down payment to get in the door. Don’t just take my word for it — Check out this video and listen to our lender April.   Her video and information can be found here. 

In the meantime, contact the Wealth Advisor Jay for all your Real Estate needs, or follow us on instagram @suttonrealtygrp.

📊 Truth #1 — Credit Matters, But It’s Not Binary

Lenders use your credit score to estimate your risk — how likely you are to make your mortgage payments on time. But there’s no single “magic” number that universally says you can or can’t buy a house. The score you need depends on which loan program you choose and what other financial strengths you bring to the table. As found on Rocket Mortgage. 

🏠 What Different Loans Require

Here’s a realistic look at how credit score expectations vary across common mortgage types:

📍 Conventional Loans

• Most lenders (not all) want around a 620 minimum — but higher scores (700+) get the best interest rates and terms. Experian+1 
  
  

📍 FHA Loans

• Backed by the Federal Housing Administration, FHA loans are designed for buyers with less-than-perfect credit.
  
  
• A 580 credit score can get you approved with just 3.5% down.
  
  
• If your score is between 500–579, you may still qualify with a 10% down payment. FHA.com+1
  
  

📍 VA Loans (Veterans)

• "The VA itself doesn’t set a firm minimum. Many lenders start around 620, but it can be lower depending on your overall profile." Veterans United 
  
  

📍 USDA Loans (Rural Buyers)

• "USDA doesn’t have a set credit minimum, but many lenders look for around 620–640. Some USDA direct loans don’t require a minimum score if your credit history shows responsible money management." Neighbors Bank
  
  

👉 "Even within these groups, lenders have their own standards. Some will look at the whole picture — income stability, debt-to-income ratio, savings, rent history, and more — not just a single score." Fidelity

🧠 What About Bad Credit?

Here’s where buyers often get confused:

• You can qualify for a mortgage with credit scores significantly below “perfect” (above 740).
  
  
• "Some loan programs accept scores in the 500s or even consider alternative credit data (like rent and utility history) when traditional scores are low." luminate.bank
  
  
• "Lower credit often means higher interest rates and maybe additional down payment or mortgage insurance, not no approval at all." Fidelity
  
  

The key is understanding that credit score isn’t destiny — it’s a factor lenders weigh alongside your employment history, savings, debt levels, and the specific loan program you’re using.

📉 So Why Do People Think You Need Perfect Credit?

Because better credit = better loan offers.
Higher scores generally get you lower interest rates, less mortgage insurance, and more choices. That means lower monthly payments over the life of the loan. NCHFA

But the reality is this: the goal isn’t perfect credit — it’s credit that’s good enough to qualify, paired with strong finances and finding the right mortgage product for your situation.

🧩 Bottom Line — Here’s the Real Answer

✔ You do not need perfect credit to buy a home.
✔ You do need to qualify for a mortgage — and that can happen with fair to good credit depending on the loan.
✔ Different programs have different expectations — and many are designed for buyers without top-tier scores.
✔ Your overall financial picture matters just as much as your credit number.

📞 Ready to Explore Your Options?

Whether you’re rebuilding credit, unsure where you stand, or ready to get pre-approved, start by talking to a lender who will look at the whole you, not just the number. That’s how buyers with imperfect credit close on homes every day.

Contact us today, 919.435.4056 or visit suttonrealtygroup.com