Can I Buy a House With a 650 Credit Score?

Is 650 a Good Credit Score?

There are two main credit scoring systems lenders use: FICO and VantageScore^®. Both use different ranges for what's considered a good credit score, but on both scales a 650 is considered a below-average credit score.

Base credit scores calculated by both models are three-digit numbers that fall between 300 and 850. FICO^® Scores^Θ fall into one of five categories. VantageScore credit scores, on the other hand, fall into one of four categories.

Your credit score is calculated based on a variety of factors, including:

• Payment history: Do you have a history of making every loan and credit card payment on time? Or have you missed some payments? Accounts sent to collections, foreclosure, car repossession and declaring bankruptcy are also considered in this portion of your credit score calculation.
• Amounts owed: This factor takes into account the total amount you've borrowed, as well as the portion of your available credit you're currently using.
• Length of credit history: The longer your history managing credit—and the longer you've had individual accounts open—the better it is for your credit scores.
• Credit mix: Having a mixture of both installment loans and revolving credit shows lenders you can balance different types of repayment.
• New credit: Too much new debt increases the chances that you'll fall behind on your older debts, so credit scoring models take into account how recently you've opened a new credit account.

Learn more: What Affects Your Credit Scores?

What Kind of Home Loan Can You Get With a 650 Credit Score?

The types of mortgages you may qualify for with a 650 credit score include:

Conventional Loans

Mortgages issued without any backing or guarantee by federal agencies are known as conventional loans, and lenders who issue them are free to decide what minimum credit score (if any) they require of qualified borrowers.

The vast majority of conventional loans issued in the U.S. are conforming loans—those mortgages that meet standards set for purchase by government-sponsored enterprises Fannie Mae and Freddie Mac. Conforming loans typically require a minimum credit score of 620, though some may require a credit score of 660 or better.

Learn more: Conforming Loan Limits

FHA Loans

The Federal Housing Administration (FHA) requires borrowers to have a minimum credit score of 500 on loans it insures.

Borrowers with scores ranging from 500 to 579 must make a minimum down payment of 10%, while borrowers with credit scores of 580 and above may qualify for financing with a down payment of 3.5%.

Learn more: FHA Loan Limits

VA Loans

The U.S. Department of Veterans Affairs (VA) sets strict eligibility standards for the loans it guarantees, but it does not require a minimum credit score.

Lenders who issue VA loans may establish their own minimum credit score requirements, however, and these typically range between 620 and 670. Even if a given lender's minimum requirement exceeds 650, you might still qualify if you're willing to make a larger down payment or accept a higher interest rate.

USDA Loans

The U.S. Department of Agriculture (USDA) guarantees mortgages on properties in rural areas of the U.S., for borrowers with incomes lower than average within these communities.

The USDA doesn't set a minimum credit score requirement on these loans, but many lenders who issue USDA loans require a score of at least 640. However, some lenders may issue USDA loans to applicants with scores as low as 620.

Learn more: How to Buy a House With Low Income

What Is the Average Mortgage Interest Rate for Someone With a 650 Credit Score?

Some mortgage lenders may require borrowers to have higher scores, but a credit score of 650 falls within many lenders' minimum requirements. A score of 650 will likely exclude you from getting a mortgage lender's best available interest rate, however.

Because your credit score is a prediction of how likely you are to repay your debts, lenders typically reserve the best rates for borrowers with higher credit scores (in the prime or super prime and very good or exceptional ranges for VantageScore and FICO^® Score models, respectively). This could mean higher monthly payments and paying thousands more over the life of your loan than someone with a higher credit score.

Example: According to January 2025 Curinos data, a borrower with a credit score of 660, on average, had an interest rate of 7.61% and an average monthly payment of $1,979 for a 30-year, $350,000 conventional mortgage. Someone with a FICO^® Score of 760 could expect an average interest rate of 7.18% and a monthly payment of $1,897. And a borrower with a FICO^® Score of 820 could expect a 7.07% interest rate and a monthly payment of $1,876.

That means a borrower with a credit score of 760 pays $82 less each month (or $29,520 over 30 years) than someone with a credit score of 660, and a borrower with an 820 credit score pays $103 less each month ($37,080 less over the course of the loan).

Try the full mortgage calculator with more features.

Pros and Cons of Getting a Mortgage With a 650 Credit Score

Obtaining a mortgage when your credit score is 650 has benefits and drawbacks, both of which deserve consideration before you decide to apply for a loan.

What Other Factors Affect Your Mortgage Rates?

Credit scores are just one tool lenders use when determining what interest rate to charge you.

Other factors that influence your mortgage rate include:

• Debt-to-income ratio: Lenders consider your debt-to-income ratio (DTI), the percentage of your monthly pretax income that goes toward paying debts, a key measure of your ability to afford a mortgage payment. Lenders typically associate a high DTI with greater risk of failure to keep up with your payments. A high DTI may bring higher interest charges or lower loan limits.
• Down payment: Conventional mortgage lenders prefer a down payment of 20% of the home's purchase price, but many allow lower down payments. As a trade-off, they typically charge a higher interest rate and require you to purchase private mortgage insurance (PMI) to protect them in case you fail to repay the loan. If you can put down 20% or more of the purchase price upfront, you may be able to negotiate a lower interest rate and skip PMI altogether.
• Loan term: Typically, you can get a lower interest rate if you apply (and qualify) for a loan with a shorter repayment term—a 15-year mortgage instead of a 30-year one, for instance. A shorter-term loan typically brings higher monthly payments but lower total interest costs.

Be Prepared and Know Your Credit Before You Apply

Credit scores encapsulate information in your credit reports. When considering mortgage applications, lenders often use credit scores as a "first pass" gauge of creditworthiness, but then look behind the scores by examining your credit reports and other financial information.

Before applying for a mortgage, it's wise to review your credit reports from all three national credit bureaus (Experian, TransUnion and Equifax). Doing so can help you prepare answers to questions lenders may have about your credit history. You can get free weekly credit reports at AnnualCreditReport.com.

Credit report entries that might spark lender concern include:

• Late or missed payments: You could probably explain an isolated incident as an honest mistake, but multiple missed payments may warrant a more detailed explanation, including how you'll avoid repeating those missteps in the future.
• Charge-offs or accounts in collections: If a lender cannot collect a debt you owe, they may give up trying and close your account (a process called a charge-off). They may also transfer the debt to a collection agency. Charge-offs and collections appear on your credit reports and remain for seven years, and could give pause to a mortgage lender.
• Major negative credit report entries: Credit report records of foreclosure, vehicle repossession or bankruptcy are often seen as red flags by mortgage lenders. If you have any of these entries on your credit report, some mortgage lenders may turn down your loan application altogether.

If you review your credit reports and find any inaccurate entries, you have the right to file a dispute to correct the record, and you should do so as soon as possible. Disputes can take up to 45 days, and lenders may be unwilling to consider loan applications while a dispute is pending, so try to avoid applying for a mortgage until after you've completed the dispute process.

How to Improve Your Credit Score Before Applying for a Mortgage

Before you apply for a mortgage, consider taking some steps that can improve your your credit scores:

• Pay down debt, especially credit card balances. Reducing the total amount you owe can improve your DTI and make your application more attractive.
• Avoid new debt. Credit checks performed when you apply for credit can temporarily lower your credit scores by a few points. Scores typically rebound within a few months if you keep up with your bills, but to maximize your scores when applying for a mortgage, avoid applying for other loans or credit cards in the months before you seek a home loan.
• Pay your bills on time. The single best habit you can adopt to encourage credit score improvement is to pay your bills on time every month, without fail.

Learn more: How to Build Credit to Buy a House

The Bottom Line

A 650 credit score is well within the eligibility limits for many types of mortgage loans, but it may qualify you for a loan with a higher interest rate. If you choose to work in improving your 650 credit score, you may gain access to more affordable loans. You can gauge where your credit stands by getting your FICO^® Score for free from Experian.