When buying a home, your credit score is a key factor in determining what type of loan you qualify for and the interest rate you’ll receive. Generally, a credit score of 620 or higher is required for most conventional loans. However, the higher your score, the better the terms you’ll likely receive. A score of 740 or above is considered excellent and can help you secure the best interest rates, which can save you a significant amount over the life of the loan.

For those with lower credit scores, there are still options. FHA loans, which are backed by the federal government and designed for first-time buyers or those with less-than-perfect credit, typically require a minimum score of 580. If your score falls between 500 and 579, you may still qualify for an FHA loan, but you’ll likely need to make a larger down payment—usually around 10%.

Other loan programs, like VA loans for veterans and USDA loans for buyers in rural areas, may have more flexible credit score requirements. VA loans, for example, don’t have a strict minimum credit score requirement, though most lenders prefer a score of at least 620. Similarly, USDA loans usually require a score of at least 640.

In addition to your credit score, lenders will also consider other factors like your income, debt-to-income ratio, and down payment when determining loan approval. A larger down payment can sometimes offset a lower credit score. If you’re planning to buy a home in Columbia, SC, I can connect you with trusted lenders who can help guide you through the mortgage process and find the best loan for your situation.