Can I buy a house with a 627 credit score?
A credit score to buy a house doesn't have to be perfect. In fact, the minimum credit score to buy a house can be as low as 580, which falls into the “fair credit” category. With a credit score of 620 or higher, you're eligible for most types of mortgages.
A 627 credit score can be a sign of past credit difficulties or a lack of credit history. Whether you're looking for a personal loan, a mortgage or a credit card, credit scores in this range can make it challenging to get approved for unsecured credit, which doesn't require collateral or a security deposit.
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. Read on to learn about credit scores and how they affect your ability to make a home purchase.
With your 627 credit score, lenders will generally consider you to be a higher-risk borrower. This means to get loan approval, you're likely to need strong qualifications when it comes to income, employment, and other debts.
Yes, you can buy a house with a 600 credit score — but it would be less challenging if your score were higher. A 600 score will not be high enough to qualify for a conventional home loan, so look into FHA loans, which have lower requirements: 500 with a 10 percent down payment, and 580 with a 3.5 percent down payment.
- How to Improve Your Credit Score From 300 to 700. To raise your score as soon as possible, you must inundate your credit reports with positive information. ...
- Pay All of Your Bills on Time. ...
- Reduce Your Debt. ...
- Use a Secured Card Responsibly. ...
- Bring Your Utilization Below 30%
- Check Your Free Credit Score. First, check your credit score for free to view the factors that are most affecting it. ...
- Pay Your Bills on Time. ...
- Pay Down Debt. ...
- Avoid New Hard Inquiries. ...
- Boost Your Credit. ...
- Get Help Building Credit.
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.
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.
Federal Housing Administration (FHA) loans need at least a 580 FICO Score with at least a 3.5% down payment (which amounts to $10,500 on a $300,000 home). Conventional loans require a minimum FICO® Score of 620 along with a 3% down payment (which amounts to $9,000 on a $300,000 home).
How bad is a 627 credit score?
Your score falls within the range of scores, from 580 to 669, considered Fair. A 627 FICO® Score is below the average credit score. Some lenders see consumers with scores in the Fair range as having unfavorable credit, and may decline their credit applications.
Credit scores range from the below: Under 300: No Credit. 300-579: Poor. 580-669: Fair.
Lender | Loan Amounts | APRs |
---|---|---|
SoFi | $5,000 - $100,000 | 8.99% - 29.99% Fixed APR with all discounts |
Wells Fargo | $3,000 - $100,000 | 7.49% - 23.24% |
USAA | $1,000 - $100,000 | 7.24% - 17.65% |
Discover | $2,500 - $40,000 | 7.49% - 24.99% |
Highlights: Most negative information generally stays on credit reports for 7 years. Bankruptcy stays on your Equifax credit report for 7 to 10 years, depending on the bankruptcy type. Closed accounts paid as agreed stay on your Equifax credit report for up to 10 years.
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.
The most commonly used FICO Score in the mortgage-lending industry is the FICO Score 5. According to FICO, the majority of lenders pull credit histories from all three major credit reporting agencies as they evaluate mortgage applications. Mortgage lenders may also use FICO Score 2 or FICO Score 4 in their decisions.
- Review Your Credit Report. ...
- Pay Your Bills on Time. ...
- Ask for Late Payment Forgiveness. ...
- Keep Credit Card Balances Low. ...
- Keep Old Credit Cards Active. ...
- Become an Authorized User. ...
- Consider a Credit Builder Loan. ...
- Take Out a Secured Credit Card.
- Get More Credit Accounts.
- Pay Down High Credit Card Balances.
- Always Make On-Time Payments.
- Keep the Accounts that You Already Have.
- Dispute Incorrect Items on Your Credit Report.
- Check for errors on your credit report. ...
- Remove a late payment. ...
- Reduce your credit card debt. ...
- Become an authorized user on someone else's account. ...
- Pay twice a month. ...
- Build credit with a credit card.
- Lower your credit utilization rate.
- Ask for late payment forgiveness.
- Dispute inaccurate information on your credit reports.
- Add utility and phone payments to your credit report.
- Check and understand your credit score.
- The bottom line about building credit fast.
Can I pay someone to fix my credit?
If you want help, you can hire a credit repair company to assist you. They generally charge anywhere from $19 to $149 a month for their services. But beware of scam credit repair offers, which may leave you in worse financial shape than before. Consumer Financial Protection Bureau.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
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.
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 required salary can vary depending on certain factors. In low rate environments with large down payments, it can be as low as $45,000 per year. However, when taking into account the cost of Private Mortgage Insurance (PMI), it could increase to as much as $95,000 per year.
References
- https://www.investopedia.com/fico-credit-scores-explained-5072985
- https://www.moneylion.com/learn/900-credit-score/
- https://www.equifax.com/personal/education/credit-cards/articles/-/learn/should-i-pay-off-my-credit-card-in-full-each-month/
- https://www.experian.com/blogs/ask-experian/credit-education/score-basics/627-credit-score/
- https://wallethub.com/credit-score-range/465-credit-score
- https://www.nerdwallet.com/article/finance/720-credit-score-is-it-good-or-bad
- https://www.moneyhelper.org.uk/en/blog/credit-rating-and-credit-score/11-worst-things-for-your-credit-score
- https://www.investopedia.com/how-much-does-it-cost-to-repair-my-credit-5077091
- https://www.lloydsbank.com/understanding-credit/why-has-my-credit-score-gone-down.html
- https://wallethub.com/credit-score-range/490-credit-score
- https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/
- https://www.cnbc.com/select/what-credit-score-should-you-have/
- https://www.bankrate.com/real-estate/what-credit-score-do-you-need-to-buy-a-house/
- https://www.bankrate.com/personal-finance/credit/trying-get-perfect-credit-score-worth-it/
- https://www.solosuit.com/posts/raise-credit-score-40-points
- https://time.com/personal-finance/article/what-credit-score-do-i-need-to-buy-a-house/
- https://www.experian.com/blogs/ask-experian/credit-education/score-basics/800-credit-score/
- https://www.creditrepair.com/blog/mortgage-and-housing-information/buy-home-california/
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/5-things-that-may-hurt-your-credit-scores/
- https://www.experian.com/blogs/ask-experian/credit-education/score-basics/666-credit-score/
- https://www.businessinsider.com/personal-finance/states-with-best-worst-credit-scores
- https://www.experian.com/blogs/ask-experian/why-did-my-credit-score-drop/
- https://www.fool.com/the-ascent/personal-loans/hardship-loans/
- https://www.upstart.com/credit-score/495-credit-score
- https://www.bankrate.com/real-estate/buying-a-house-600-credit-score/
- https://www.nerdwallet.com/article/finance/vantagescore-4-0
- https://www.cnbc.com/select/easiest-personal-loans/
- https://wallethub.com/credit-score-range/820-credit-score
- https://www.upstart.com/credit-score/643-credit-score
- https://www.bankrate.com/personal-finance/credit/what-credit-score-do-you-start-with/
- https://www.nerdwallet.com/article/finance/what-is-a-good-credit-score
- https://www.creditninja.com/blog/what-is-a-tier-4-credit-score/
- https://www.fool.com/the-ascent/credit-cards/if-pay-off-credit-card-does-credit-score-change/
- https://www.experian.com/blogs/ask-experian/credit-education/score-basics/495-credit-score/
- https://wallethub.com/answers/cs/how-long-to-go-from-300-to-700-credit-score-1000028-2140832799/
- https://www.cnbc.com/select/average-credit-score-by-state/
- https://stellarfi.com/answer/what-credit-score-does-carmax-use
- https://www.lendingtree.com/auto/what-credit-score-is-needed-to-buy-a-car/
- https://www.bankrate.com/real-estate/buying-a-house-800-credit-score/
- https://www.experian.com/blogs/ask-experian/how-to-get-a-car-loan-if-you-have-bad-credit/
- https://www.creditkarma.com/advice/i/is-credit-karma-accurate
- https://themortgagereports.com/37200/preparing-to-buy-a-home-how-to-raise-credit-score-fast
- https://www.nerdwallet.com/article/finance/what-is-the-average-credit-score-by-age-and-what-is-a-good-score-for-my-age
- https://www.bankrate.com/personal-finance/credit/no-credit-better-bad-credit/
- https://www.investopedia.com/articles/credit-loans-mortgages/081416/fico-5-vs-fico-8-what-are-differences.asp
- https://www.cnet.com/personal-finance/credit-cards/advice/heres-why-your-credit-score-dropped-after-paying-off-your-debt/
- https://wallethub.com/answers/pl/how-much-can-i-borrow-with-a-500-credit-score-1000508-2140806905/
- https://www.capitalone.com/learn-grow/money-management/what-is-a-bad-credit-score/
- https://support.rentspree.com/en/credit-score-is-na
- https://www.cbsnews.com/news/how-much-income-do-you-need-to-buy-a-250000-home/
- https://www.equifax.com/personal/education/credit/report/articles/-/learn/how-long-does-information-stay-on-credit-report/
- https://www.creditstrong.com/how-to-raise-credit-score-by-200-points/
- https://www.capitalone.com/learn-grow/money-management/starting-credit-score/
- https://www.nerdwallet.com/article/finance/credit-score-needed-to-buy-car
- https://www.chase.com/personal/credit-cards/education/basics/average-credit-score-by-age
- https://www.capitalone.com/learn-grow/money-management/lowest-credit-score/
- https://www.carsdirect.com/auto-loans/getting-a-car-loan/how-much-should-i-put-down-on-a-20-000-car
- https://www.experian.com/blogs/ask-experian/credit-education/score-basics/444-credit-score/
- https://www.jvmlending.com/blog/what-salary-do-you-need-to-afford-a-250000-home/
- https://time.com/personal-finance/article/750-credit-score/
- https://www.bankrate.com/personal-finance/credit/no-credit-score-zero-credit/
- https://www.upstart.com/credit-score/595-credit-score
- https://www.upstart.com/credit-score/723-credit-score
- https://www.investopedia.com/average-credit-scores-by-age-5214511
- https://themortgagereports.com/11306/buy-a-home-with-a-low-downpayment-or-no-downpayment-at-all
- https://www.capitalone.com/learn-grow/money-management/credit-score-needed-to-buy-a-house/
- https://www.fico.com/en/latest-thinking/solution-sheet/fico-score-4
- https://wallethub.com/credit-score-range/704-credit-score
- https://lendedu.com/blog/auto-loan-calculator/
- https://www.nerdwallet.com/article/finance/why-did-my-credit-score-drop
- https://www.chase.com/personal/credit-cards/education/credit-score/900-credit-score
- https://www.cnbc.com/2023/11/02/average-credit-score-by-age-in-the-us.html
- https://www.businessinsider.com/personal-finance/average-credit-score
- https://www.usatoday.com/money/blueprint/credit-score/what-is-the-highest-credit-score/
- https://www.usatoday.com/money/blueprint/credit-score/lowest-credit-score/
- https://www.creditstrong.com/how-to-get-an-800-credit-score/
- https://www.upstart.com/credit-score/720-credit-score
- https://rcs.co.za/media/credit-score-ratings-ranges-in-south-africa-rcs/
- https://www.rocketmoney.com/learn/debt-and-credit/what-is-the-average-credit-score-by-age
- https://www.creditstrong.com/which-fico-score-do-mortgage-lenders-use/
- https://www.lendingtree.com/credit-repair/how-auto-loan-affect-your-credit-score/
- https://www.bankrate.com/real-estate/average-credit-score-to-buy-a-house/
- https://www.experian.com/blogs/ask-experian/what-credit-score-do-i-need-to-buy-a-house/
- https://caredge.com/guides/what-credit-score-do-car-dealers-use
- https://www.investopedia.com/articles/personal-finance/080615/highest-credit-score-it-possible-get-it.asp
- https://www.nerdwallet.com/article/finance/credit-score-drop-pay-debt
- https://www.upstart.com/credit-score/627-credit-score
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/why-credit-scores-may-drop-after-paying-off-debt/
- https://www.caranddriver.com/auto-loans/a43048531/what-credit-score-do-you-need-for-a-car-loan/
- https://www.ficoscore.com/where-to-get-fico-scores
- https://wallethub.com/answers/pl/how-much-can-i-borrow-with-a-670-credit-score-1000508-2140806887/
- https://www.rocketmortgage.com/learn/what-credit-score-is-needed-to-buy-a-house
- https://www.creditkarma.com/credit-scores/627
- https://www.businessinsider.com/personal-finance/what-is-the-lowest-credit-score
- https://www.creditstrong.com/raise-your-credit-score-100-points/
- https://www.moneyhelper.org.uk/en/blog/credit-rating-and-credit-score/999-credit-score-but-been-refused-a-loan
- https://www.upstart.com/credit-score/494-credit-score
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/what-is-a-good-credit-score/
- https://refi.com/calculator/mortgage-required-income-calculator/
- https://www.marketwatch.com/guides/car-loans/how-much-down-payment-for-a-car/
- https://www.bankrate.com/personal-finance/credit/bad-credit-score/
- https://themortgagereports.com/23319/7-mortgage-programs-low-minimum-credit-score
- https://www.experian.com/blogs/ask-experian/credit-education/score-basics/750-credit-score/
- https://www.investopedia.com/what-credit-score-do-you-need-to-buy-a-car-5181034
- https://www.experian.com/blogs/ask-experian/actions-that-can-lower-your-credit-score/
- https://stellarfi.com/answer/what-credit-score-is-needed-to-buy-a-300k-house
- https://listerhill.com/blog/2019/6/getting-auto-loan-with-600-credit-score
- https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/how-to-fix-a-bad-credit-score/
- https://www.bankrate.com/real-estate/buying-a-house-700-credit-score/
- https://www.tdecu.org/blog/what-no-credit-score-means
- https://www.creditninja.com/blog/who-will-give-me-a-loan-when-no-one-else-will/
- https://www.chime.com/blog/whats-a-good-credit-score-in-your-20s/
- https://www.nerdwallet.com/article/loans/auto-loans/how-much-down-payment-make-buying-car
- https://www.sofi.com/learn/content/how-many-line-of-credit-should-i-have/
- https://www.opploans.com/oppu/credit-reports/can-bad-credit-even-good-income/
- https://wallethub.com/answers/cs/is-a-credit-score-of-1000-possible-1000025-2140832279/
- https://mstreetbank.com/what-is-a-credit-score/
- https://wallethub.com/answers/cs/what-percentage-of-population-has-over-800-credit-score-2140839387/
- https://www.lendingtree.com/credit-cards/articles/raise-credit-score-30-days/