Can I Buy a House with a 600 Credit Score in 2024?

By: Valencia Higuera Updated By: Ryan Tronier Reviewed By: Paul Centopani
March 22, 2024 - 13 min read

How to qualify for a mortgage loan with a 600 credit score

“Can I buy a house with a 600 credit score?” is a question many first-time home buyers often ask.

The reassuring answer is yes—if you have a steady income and stable employment and can handle mortgage payments, a 600 credit score shouldn’t be a roadblock in your dream of homeownership.

The trick is to choose a 600 credit score home loan program tailored to suit your credit history, your income, and the home you’re looking to purchase.

Verify your mortgage eligibility. Start here

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Can I buy a house with a 600 credit score?

Yes, you can qualify to buy a house with a 600 credit score. In fact, there are several loan programs specifically tailored to help people with lower credit scores.

But this doesn’t mean everyone with a low score can qualify for a mortgage. You’ll have to meet other standards set by lenders, too.

Verify your mortgage eligibility. Start here

  • Lenders must verify your income and confirm your ability to afford a mortgage payment. If you’re self-employed, you may have to submit bank statements or evidence of steady income.
  • Typically, you must be employed for at least two consecutive years to qualify for a home loan. Although there are some exceptions to the two-year job history rule.
  • Your credit history must be good, too. This means no late payments or negative information has been reported to the credit bureaus within the past 12 months.
  • Your existing debt-to-income ratio can't be too high. To qualify for a mortgage, your total debts, including the future home loan, typically need to be under 45% of your pre-tax income.

Your debt-to-income ratio (DTI) is your monthly debt obligations as a percentage of your gross monthly income.

For example, if you make $3,000 a month before taxes and have $500 worth of monthly debt repayments, your DTI is 17%. Debts that count toward your DTI include things like minimum credit card payments, auto loans, student loans, and so on.

If you meet these other criteria, you should be able to accomplish the dream of homeownership and buy a house with a 600 credit score. You just have to choose the right mortgage loan program.

Mortgage loans for a 600 credit score

There are several 600 credit score home loans available to both first-time home buyers and repeat borrowers. These options often include government-backed loans, such as FHA and VA loans, which are designed to offer more flexible qualification criteria.

Check your loan options. Start here

FHA loans

The Federal Housing Administration (FHA) is a government agency that backs this mortgage. FHA loans are designed for low-to-moderate-income borrowers who may have lower than average credit scores.

These loans require a credit score of at least 580 and a down payment of 3.5% of the home’s purchase price. If your credit score is below 580, however, you’re not disqualified. You just need a larger down payment of 10%.

FHA loans also allow higher debt-to-income ratios than conventional loans, making them an excellent choice for borrowers with higher debt levels. But the drawback is that you’re on the hook for mortgage insurance premiums (MIP) until you refinance into another type of mortgage or until the loan balance is paid in full.

FHA mortgage insurance

FHA loans come with a specific cost known as a mortgage insurance premium (MIP). This MIP is a separate charge and is paid monthly based on a percentage of your loan amount. You pay MIP until the loan balance is paid in full or until you refinance into a conventional loan.

FHA mortgage insurance consists of two specific costs:

  1. Upfront mortgage insurance premium (UFMIP) that is equal to 1.75% of the total loan amount. UFMIP can be rolled into the loan balance to avoid any upfront out-of-pocket expenses
  2. Monthly MIP is a separate charge paid alongside your monthly mortgage payment, and it’s calculated as a percentage of your loan amount.

FHA loans are usually the best option for a 600 credit score home loan. But if you’re considering one, it’s important to understand how mortgage insurance premiums add to the overall expense of your monthly mortgage payment.

Verify your FHA loan eligibility. Start here

VA loans

VA loans are mortgages guaranteed by the U.S. Department of Veterans Affairs and designed to offer long-term financing to eligible American veterans, active-duty service members, and their surviving spouses.

VA home loans don’t have a minimum credit score requirement, so it’s possible to get this type of loan and buy a house with a 600 credit score. However, lenders are allowed to set their own minimums, which typically range between 580 and 660.

Moreover, this type of mortgage does not require a down payment, and it also tends to have competitive mortgage interest rates. In order to qualify, you’ll need a Certificate of Eligibility (COE). Your lender can acquire one for you online, usually in a matter of minutes. Eligible borrowers will also need to pay a one-time VA funding fee, which is usually rolled into the loan balance.

USDA loans

USDA loans are guaranteed by the U.S. Department of Agriculture and have the advantage of having no down payment requirement. To be eligible, you must meet household income limits and purchase a home within a rural area designated by the USDA. Borrowers also have to pay for mortgage insurance, which consists of an annual fee as well as an initial guarantee fee.

Each lender has different credit score requirements for USDA loans. So, if you locate one that accommodates your credit history, you can feasibly get a USDA loan with a 600 credit score.

Non-Qualified Mortgages

Non-qualified mortgages (Non-QM) are home loans that do not meet the Consumer Financial Protection Bureau’s (CFPB) rules for a qualified mortgage. These loans cater to borrowers with unique income-qualifying circumstances, such as self-employed individuals, real estate investors, or those with significant assets.

Non-QM loans may have more flexible income requirements and higher interest rates to offset the added risk. Banks that have the resources to set up and maintain their own distinctive mortgage programs are typically the ones that offer non-QM loans.

You can look for one on your own or work with a mortgage broker who can recommend loan products that you’re likely to qualify for with a 600 score.

How a 600 credit score affects your mortgage rate

If you find yourself asking, “Can I buy a house with a 600 credit score?” the straightforward answer is yes. However, a credit score of 600 comes with certain financial implications, particularly when it comes to your mortgage rate.

Generally, the lower your credit score, the higher the interest rate you’ll likely face. This means higher monthly payments and a larger total amount paid in interest over the life of the loan.

Check your loan options. Start here

When you aim to buy a house with a 600 credit score, your credit rating has a direct influence on your mortgage rate. This impact comes from what the industry calls “loan-level price adjustments” (LLPAs). These are risk-based fees that lenders usually add to the interest rate for borrowers with less-than-stellar credit scores or small down payments.

How do higher interest rates affect the cost of borrowing? Let’s look at how much interest you’ll pay over the life of the loan when borrowing $200,000 with a 30-year fixed-rate loan.

Interest RateMortgage PaymentTotal Interest Paid

Calculations are approximations and do not include property taxes, homeowners insurance, or other fees.

So, while buying a home with a 600 credit score is certainly possible, understand how a low credit score can influence the terms and overall expenses of your mortgage.

“Ask your loan officer if they have any ideas around increasing your credit score; they may be able to help you quickly boost your scores to help you get a better rate,” advises Jon Meyer, loan expert and licensed MLO.

The best mortgage choice will vary by person, so it’s important to compare all your loan options before buying.

How to improve your credit score

A higher credit score of 720 or greater will typically qualify you for the lower mortgage interest rates you see advertised.

Verify your mortgage eligibility. Start here

Here’s a general breakdown of FICO credit score ranges, which are most commonly used by lenders in the United States:

  • Excellent: 800 to 850
  • Very good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Poor: 300 to 579

If you have some time before you plan to buy a home, it’s worth trying to increase your creditworthiness, especially if you’re starting from a position of bad credit. Even a few-point difference can fetch you lower interest rates, which in turn will save you money on your monthly mortgage payment.

The pace at which you’re able to increase your credit score depends on many factors, such as the cause of a low score and your current credit history. But if you’re looking for the quickest path to better credit, there are a few steps anyone can take.

Pay bills on time

For example, always pay your bills on time. By doing so, your score will increase little by little each month.

But you need to prioritize your payments. Make your debt payments first, then your utilities. Of course, you should always pay your water and electricity bills, but missing these payments doesn’t affect your credit score like missing a payment on credit card debt or an auto loan.

The only exception is if you need to use non-traditional credit to qualify, which means you have no credit history. Then, in order to qualify you, your lender will examine your payments, such as utility bills and rent.

Debt payment history makes up 35% of your credit score, and each timely payment results in positive activity reported to the credit bureaus.

Pay down existing debts

You can also pay down debt to increase your credit score. The amount you owe makes up about 30% of your score. Therefore, keeping credit card balances below 30% of your available credit limit can have a big impact on your mortgage application.

Better yet, pay off your balances in full each month. Also, avoid opening any new credit cards or taking out any loans.

Improving your credit utilization ratio is one of the fastest ways to increase your credit score, possibly raising it within a month.

Check your loan options. Start here

Flag and remove errors

It’s also important to remove errors from your credit report. Negative items reported in error can lower your credit score, too.

Typically, you can get one free credit report per year using the site This gives you more leverage to monitor your creditworthiness and fix errors or red marks as soon as they appear.

Keep in mind that legitimate negative items like foreclosures and bankruptcy can remain on your credit history for years.

Consider a rapid rescore

You can also talk to your mortgage lender about a process called rapid rescoring.

If you have proof of a credit report error, your lender can use this service to quickly update your credit report and provide a new credit score within days.

Sometimes, rapid rescoring increases a credit score by 100 points or more. But the amount it will help you with depends on the severity of the errors on your credit report.

Opt for a credit-builder loan

Credit-builder loans aim to help you improve your credit through consistent payments. Typically, smaller banks and credit unions are the ones who offer these loans.

Unlike traditional loans, you don’t receive the loan amount upfront. Instead, the lender deposits it into a savings account and collects your payments, with interest, during the loan term.

You’ll gain access to the funds once you’ve fully repaid the loan, usually within a time frame of six to 24 months.

Keep credit cards open

The duration of your credit history plays a role in your overall credit score. So, maintaining open credit card accounts can be beneficial for your credit health. You may consider closing a seldom-used account or one with high fees, but there’s a workaround. Keep it active by linking the card to a minor recurring bill and setting up reminders for payments.

You can also contact your card issuer to inquire about downgrading to a card with fewer or no annual fees.

Avoid applying for new credit

Each new credit application generates a hard inquiry on your credit report.

Additionally, opening a new credit line can reduce the average age of your credit history and add to your overall debt. These factors could negatively impact your credit score. So, think twice before you open a new account.

Become an authorized user

Another strategy involves becoming an authorized user on a creditworthy friend or family member’s credit card account. This means you’ll have your own card to make purchases, but you aren’t obligated to manage payments.

The account’s activity—whether positive or negative—will appear on your credit reports alongside the primary cardholder’s.

Mortgage loan options for 620 credit scores or higher

Curious about the type of home loan you can get with a good credit score? If you’re working with a score above 600, you’ve got more options that could make your homeownership aspirations a reality.

Let’s explore some popular options that could be more advantageous than a mortgage loan for a 600 credit score.

Check your conventional loan options with multiple lenders. Start here

  • Conventional loans: These loans may have stricter qualifying requirements, but they offer lower overall costs and are ideal for individuals with higher credit scores above 620. Furthermore, down payments under 20% require private mortgage insurance (PMI), which is eliminated once you reach 20% equity.
  • Fannie Mae HomeReady: This program is designed for low-income borrowers who have a credit score of at least 620. It also offers a minimal down payment of 3%. Household members’ income can be included for qualification, making it easier for people from diverse financial backgrounds to qualify.
  • Freddie Mac Home Possible: Individuals with higher credit scores of 660 or greater can qualify for this loan, which also provides the benefit of a low 3% down payment option. This opportunity is only available to first-time home buyers and is not accessible to repeat or second-home buyers.

FAQ: Mortgage loans for a 600 credit score

Can you buy a house with a 600 credit score?

Absolutely! You can buy a house with a 600 credit score, especially with government-backed mortgage options like FHA loans. However, you may face higher interest rates and additional mortgage insurance costs. It’s crucial to shop around for the best mortgage rates and terms to fit your financial situation.

How do I check my credit?

You can check your credit by obtaining reports from major credit bureaus such as Experian, Equifax, and TransUnion, ideally 6–12 months before you plan to apply for a mortgage. This allows you to understand your credit history and take steps to improve your score. Ensure you use a service that provides FICO scores, as this is the scoring model used by mortgage lenders, to get the most accurate insight into where you stand.

Is it challenging to buy a house with a 600 credit score?

Buying a house with a 600 credit score can come with several challenges. You may face higher interest rates, which can significantly increase the overall cost of your home. You may also have a harder time qualifying for a loan, and if you do qualify, you may need to provide a larger down payment. Some lenders may also require you to have a higher amount of home equity, or the portion of the home you actually own, before they’ll approve a loan.

Are there any advantages to buying a house with a 600 credit score?

While buying a house with a 600 credit score can be challenging, there are some potential advantages. For one, if you’re able to secure a mortgage and make your payments on time, it can be a good way to build your credit. Additionally, some down payment assistance programs and FHA loans are specifically designed for borrowers with lower credit scores.

What are some alternative home-buying options if I have a 600 credit score?

If you have a 600 credit score and are struggling to qualify for a traditional mortgage, there are several alternative home-buying options you might consider. Rent-to-own agreements can be a good option, as they allow you to start building equity in a home even if you’re not yet ready to secure a mortgage. You might also consider a co-signer, who can help you qualify for a loan by agreeing to take responsibility for the payments if you’re unable to make them. Finally, looking into down payment assistance programs can also be a good option for those with lower credit scores.

Next steps: Find the best mortgage loans for a 600 credit score

To recap, a 600 credit score is high enough to qualify for a few different types of mortgages. But credit isn’t the only thing that matters.

Before approving you to buy a house, a lender also needs to verify your employment status, income, and debt-to-income ratio to ensure you can make monthly payments on your mortgage. So the best way to find out whether you can buy a house with a 600 score is to check in with a few lenders.

Applying with a lender is usually free, and it will give you a concrete idea of whether you qualify for a home purchase. Begin the process by clicking the links below.

Time to make a move? Let us find the right mortgage for you

Valencia Higuera
Authored By: Valencia Higuera
The Mortgage Reports contributor
Valencia Higuera is a freelance writer from Chesapeake, Virginia. As a personal finance and health junkie, she enjoys all things related to budgeting, saving money, fitness, and healthy living.
Ryan Tronier
Updated By: Ryan Tronier
The Mortgage Reports Editor
Ryan Tronier is a personal finance writer and editor. His work has been published on NBC, ABC, USATODAY, Yahoo Finance, MSN Money, and more. Ryan is the former managing editor of the finance website Sapling, as well as the former personal finance editor at Slickdeals.
Paul Centopani
Reviewed By: Paul Centopani
The Mortgage Reports Editor
Paul Centopani is a writer and editor who started covering the lending and housing markets in 2018. Previous to joining The Mortgage Reports, he was a reporter for National Mortgage News. Paul grew up in Connecticut, graduated from Binghamton University and now lives in Chicago after a decade in New York and the D.C. area.