Can You Buy A House With No Credit? Tips And Loan Options For Those With No Credit Score

Mar 6, 2024

6-minute read

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A row of townhouses, representing real estate properties.

Are you dreaming of owning your own home, but worried about your lack of credit? While having a good credit score is typically a crucial factor in getting approved for a mortgage, don’t let your lack of credit affect your homeownership status. Let’s explore what options are available to home buyers with no credit history.

Do You Need Credit To Buy A House?

Let’s start off with the easy answer. No, you don’t need credit to buy a house. Having an established credit history and a good credit score can improve your chances of qualifying for a mortgage. But if you are looking to buy a house with no credit, there are loan options available.

While the exact credit score typically needed to buy a house will depend on your lender, here are some ballpark numbers for different types of home loans:

  • Conventional mortgage: 620 or better
  • FHA loan with 3.5% down: 580 or better (This is the minimum score requirement at Rocket Mortgage®)
  • FHA loan with 10% down: 500 or better with participating lenders
  • VA loan: 580 or better

Having a well-established credit history can increase your chances of better loan terms and lower interest rates. But what happens to home buyers with no credit or bad credit? Let’s take a look.

No Credit Vs. Bad Credit 

There’s an important distinction between having no credit and having bad credit. If a home buyer has no credit, they have no credit record or history. If a home buyer has bad credit, they have a credit record, but it’s likely tarnished by past mistakes.

If you have no credit, lenders don’t have a way to predict or measure the likeliness that you’ll abide by your loan terms. Even if you have a steady income, lenders will see your lack of credit as a risk because you have no track record of paying back debt. A poor credit score is often defined as a score below 600 on a 300 – 850 scale. If your credit score falls into this category, you may find that some lenders are reluctant to extend credit. Because a bad credit score can raise red flags for lenders, it can be easier for a home buyer to qualify for a mortgage with no credit rather than bad credit.