Can I buy a house with a 539 credit score?
To buy a house with a conventional loan, for example, you'll need at least a 620 credit score. But don't worry. Even if your credit score hovers somewhere in the 500 – 600 range, you can still secure a home loan. While every lender is different, knowing your score and how it may impact your loan application is key.
Credit score required: 620
Conventional loans are the most common type of mortgage, accounting for about 70% of the market. They usually require a 620 credit score, though some lenders will consider applicants with scores as low as 580.
A 539 FICO® Score is significantly below the average credit score. Many lenders choose not to do business with borrowers whose scores fall in the Very Poor range, on grounds they have unfavorable credit.
For a conventional mortgage in California, you typically need a minimum score of at least 600. If you qualify for certain government-backed loans, however, you may be able to buy a home with a score as low as 500.
Type of Credit | Do You Qualify? |
---|---|
Secured Credit Card | YES |
Home Loan | YES (FHA Loan) |
Unsecured Credit Card | MAYBE |
Auto Loan | NO |
By Matt Frankel, CFP® | Updated Dec 13, 2022. 539 Poor. If you have a credit score of 539, you are considered to have a below average credit rating.
Conventional loan | Credit score: 620
To qualify for a conventional loan, you'll need a credit score of at least 620, though some lenders may choose to approve conventional mortgage applications only for borrowers with credit scores of 680 and up.
Lender | Loan Amounts | APRs |
---|---|---|
Oportun | $300 - $18,500 | 10.07% - 35.95% |
OneMain Financial | $1,500 - $20,000 | 18% - 35.99% |
RISE | $500 - $5,000 | 60% - 299% |
Jora Credit | $500 - $4,000 | 99% - 349% |
You will need a credit score of 580 or higher to get a $30,000 personal loan in most cases, along with enough income to afford the monthly bill payments. Other common loan requirements include being at least 18 years old, being a U.S. citizen or a permanent resident, and having a valid bank account.
Type of Credit | Do You Qualify? |
---|---|
Home Loan | YES (FHA Loan) |
Unsecured Credit Card | MAYBE |
Auto Loan | NO |
Personal Loan | NO |
What credit score is needed to buy a $200 000 house?
Most conventional loans are backed by mortgage companies Fannie Mae and Freddie Mac. Fannie Mae says that conventional loans typically require a minimum credit score of 620.
To qualify for an FHA-insured loan, you need a minimum credit score of 580 for a loan with a 3.5% down payment, and a minimum score of 500 with 10% down. However, many FHA lenders require credit scores of at least 620.
Minimum Credit Score | |
---|---|
Conventional loan | 620 for fixed-rate loans; 640 for adjustable-rate mortgages; lenders may have stricter requirements. |
FHA loan | 580 with a 3.5% down payment; 500 with a 10% down payment. |
- Build an emergency fund with at least a few months expenses.
- Avoid spending more on your credit cards than you have in cash.
- Don't take out any loan with monthly payments that you'll struggle to repay. Stay within your budget!
- Set up automatic payments for your credit cards and installment loans.
Credit Rating: 586 is considered a bad credit score. Borrowing Options: Most borrowing options are available, but the terms are unlikely to be attractive. For example, you could borrow a small amount with certain unsecured credit cards or a personal loan for damaged credit, but the interest rate is likely to be high.
- Peer-to-Peer Lending. ...
- Car Title Loans. ...
- Borrow Money From a Friend or Family Member. ...
- Pawnshop Loans. ...
- Payday Loans. ...
- Credit Card Cash Advance.
It's highly unlikely you'll qualify for a conventional mortgage with your credit score. The lending standards of both Fannie Mae and Freddie Mac require a minimum credit score of 620, and even this level requires a strong debt-to-income ratio and a rather large down payment.
Some types of mortgages have specific minimum credit score requirements. A conventional loan requires a credit score of at least 620, but it's ideal to have a score of 740 or above, which could allow you to make a lower down payment, get a more attractive interest rate and save on private mortgage insurance.
Average FICO 8 Score by Generation | ||
---|---|---|
Generation | 2022 | 2023 |
Generation Z (ages 18-26) | 679 - Good | 680 - Good |
Millennials (27-42) | 687 - Good | 690 - Good |
Generation X (43-58) | 707 - Good | 709 - Good |
Based on these figures and the 28% rule, you would need to earn about $66,903.57 per year to afford a $250,000 home with a 20% down payment — or about $81,171.43 per year to afford it with no down payment.
How much income do you need for a $250000 mortgage?
A $250,000 home, with a 5% interest rate for 30 years and $12,500 (5%) down requires an annual income of $65,310.
The minimum down payment to buy a home with an FHA loan is just 3.5 percent of the home's purchase price. That means the down payment for, say, a $250,000 home would be $8,750 with this type of loan.
The easiest types of loans to get approved for don't require a credit check and include payday loans, car title loans and pawnshop loans — but they're also highly predatory due to outrageously high interest rates and fees.
Hardship personal loans are a type of personal loan that is designed to help you overcome financial difficulties. This type of loan is generally offered by small banks and credit unions, and has lower interest rates, lower maximum loan amounts, and shorter repayment periods than standard personal loans.
Technically, you can get approved for an FHA loan with a median FICO® Score of as low as 500, but an FHA loan with a score that low has some serious drawbacks. The first drawback is that you'll need a down payment of at least 10%. Secondly, when qualifying with a score that low, it's considered a subprime loan.
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