Most mortgage lenders require a FICO® Score of at least 620 for a conventional home loan, so having bad credit can make the homebuying process even more challenging.
There are lenders that will approve applicants with less-than-perfect credit, however, as well as those that review criteria beyond your credit score. There are also government-backed loans with flexible credit requirements.
CNBC Select has named the top mortgage lenders for bad credit in a variety of categories, including Federal Housing Authority (FHA) loans, speedy closings, military homebuyers and borrowers with no credit. For more details on how we made our selections, see our methodology.
Are you living paycheck to paycheck, or do you have a financial success you're comfortable sharing with a reporter? Please fill out this quick form.
Best for FHA loans: Rocket Mortgage
Who's this for? Rocket Mortgage is one of the nation's largest providers of FHA loans, which are available with a credit score as low as 500 if you put 10% down.
Standout benefits: Rocket Mortgage's Fresh Start program helps applicants boost their credit scores before applying. The online lender also offers several low-down-payment options, including the ONE+ loan from Rocket Mortgage, which lets eligible borrowers put down 1%.
- Offers a 1% down mortgage, making it a great option for first-time homebuyers who don't have enough saved up for a down payment.
- Above average scores for customer satisfaction from J.D. Power, meaning you'll be in great hands from application to closing day.
- With an average closing time of 22 days — nearly half the industry average — homeowners will be able to get the keys to their home as soon as possible.
- Rocket will give you a rebate of up to $10,000 for buying with Rocket Homes, which pairs homeowners with a real estate agent.
- No USDA mortgages, construction loans or HELOCs
- Hard credit check required for customized rate
- No physical branches
Best for no credit: Guild Mortgage
Who's this for? If your credit file is thin or non-existent, we recommend Guild Mortgage. It reviews other approval criteria, including on-time rent, insurance and utility bill payments.
Standout benefits: Guild's Zero Down mortgage combines a 3.5% FHA loan with a forgivable second mortgage to bring your down payment down to 0%. Borrowers can be approved with credit scores as low as 600.
- Offers a wide range of uncommon loans, so you're more likely to find one that fits your needs than with other lenders.
- Boasts several down payment assistance programs, making it a great lender for first-time homebuyers who may not have much saved up for a down payment.
- Some loans closes can receive a 17 day closing guarantee, which can ensure you get the keys to your home in quicker than half the average timeline.
- E-closings available so you may be able to finalize your mortgage paperwork from your couch.
- Rates are not available online
- Does not issue mortgages in New York
Best for non-qualifying mortgages: Carrington
Who's it for? Are you a gig worker, LLC owner or freelancer? Carrington Mortgage Services has a mortgage for you. Its non-QM Flexible Advantage loan requires a FICO score of just 550, making it a good option if you're self-employed, lack a credit history, have a bankruptcy or foreclosure in your past.
Standout benefits: Besides loans, Carrington offers various homeownership services, including real estate, title search, escrow and home insurance.
- Accepts 550 credit score for non-QM Flexible Advantage loan, making it a great option for those with less-than-perfect credit
- Term lengths as long as 40 years, a decade longer than most lenders offer
- Accepts alternative credit sources, such as on-time bill payments, so you can get a loan even if you don't have traditional credit.
- Mortgages not available in Massachusetts or North Dakota
- No home equity loans or HELOC
- Must work with loan officer to complete application
Best for a quick closing: CrossCountry Mortgage
Who's this for? If speed is your priority, CrossCountry Mortgage is worth consideration. It boasts that it can close most home loans in as little as 21 days —about half the time lenders typically take. It also accepts alternative forms of credit for specific loan products.
Standout benefits: First-time buyers who meet income or location requirements can qualify for up to $6,500 in down payment assistance from CrossCountry.
- $6,500 in down payment assistance
- High scores for customer satisfaction
- May be able to close within 10 days
- Higher-than-average rates
- Rates not available online
Best for veterans: Navy Federal Credit Union
Who's this for? If you're a military family, we suggest Navy Federal Credit Union. It issues mortgages to active-duty military, veterans, DoD civilian employees and their families. Borrowers can apply with non-traditional credit sources, like proof of on-time rent and utility bill payments. Existing NFCU customers' banking history is also taken into account.
Standout benefits: If you opt for a 0.25% rate increase, Navy Federal's 1.00% origination fee can be waived. The Military Choice mortgage is similar to a VA loan in that there's no down payment or private mortgage insurance, but sellers can contribute up to 6% of the home's value toward closing costs.
Calculate your monthly mortgage payment
What credit score do you need for a mortgage?
Your credit score is one of the primary factors lenders consider when deciding whether to approve your mortgage application and what interest rate to charge.
Most lenders prefer a 620 credit score for a conventional mortgage, but there are other options for borrowers with lower scores, including government-backed FHA, VA and USDA loans.
| Mortgage type | Minimum credit score |
|---|---|
| Conventional loan | 620 |
| Jumbo loan | 700 |
| FHA loan | 580 (or 500 with 10% down) |
| VA loan | 620 |
| USDA loan | 640 |
How to get a mortgage with bad credit
You have some options for buying a home even if your credit score is below 620.
Apply for an FHA loan
FHA loans are insured by the Federal Housing Administration (FHA) and accept borrowers with a credit score as low as 500, with at least 10% down. With a 580 score, you can put as little as 3.5% down. Unlike other government-backed loans, eligibility is not limited by income, location or military service.
Save for a larger down payment
The larger your down payment, the easier it is to get a mortgage. Some lenders don't just look at a borrower's credit score; they examine their complete financial profile. Bolstering your down payment can improve that financial profile.
Get a co-signer
If your credit is not up to snuff, you may be able to get a mortgage with the help of a co-signer with good credit and a steady income stream.
A co-signer can be anyone, including a family member or friend, who agrees to assume responsibility for the mortgage if you fail to make payments.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
10–30 years
620
5% for conventional loans, 3.5% for FHA loans, 0% for VA loans, 10.01% for jumbo loan
10, 15 or 30 years for fixed-term conventional loans, 30-year VA and FHA loans. Custom mortgages with fixed-rate terms from 8 to 29 years.
620 for conventional, 500 for FHA
0% for VA, 1% for RocketONE+, 3% for conventional, 3.5% for FHA, 10% to 15% for jumbo
How to shop for a mortgage lender
Before you start looking for your dream home, get your financial house in order.
- Review your credit report: Knowing your credit score can give you a better idea of the rate you'll qualify for. It can also help you identify errors or signs of fraud that may be unfairly lowering your score.
- Decide what type of mortgage you want: Depending on your finances and the home you're buying, you may want to focus on a conventional mortgage, a government-backed FHA, USDA or VA loan, or a jumbo mortgage. Make sure any lender you consider offers the loan type you're interested in.
- Get prequalified (or preapproved): Prequalification can give you a sense of your budget without impacting your credit score. Preapproval requires a hard credit pull but it shows sellers you're a serious buyer. It can also speed up the closing process by giving your lender the information needed to underwrite your mortgage.
- Compare offers: Request estimates from three to five lenders and compare APRs, loan terms, monthly payments and estimated closing costs. Depending on your situation, you may want to focus on lenders with strong down payment assistance programs, faster average closing times or options for virtual closings.
How to improve your credit score, step-by-step
There are different credit scoring models, but the FICO Score is the most widely used. It's determined by reviewing your credit reports from the three main credit bureaus and assigning weights to different factors.
- Payment history (35%): Whether you pay your bills on time.
- Credit usage (30%): The amount of credit you're using compared to your total credit limit, also known as your credit utilization rate.
- Length of credit history (15%): The length of time you've had credit.
- New credit (10%): How often you apply for and open new accounts.
- Credit mix (10%): Having a variety of installment loans and revolving credit accounts, including credit cards, auto loans, mortgages and personal loans.
If you're getting ready to apply for a mortgage, follow these steps.
1. Pay your bills on time and in full
Your payment history accounts for 35% of your FICO score, so paying credit card bills, loans and other debts on time is the easiest and most impactful way to raise your score. Setting reminders or enrolling in autopay will reduce the likelihood that you'll miss a payment.
Paying the total amount due will also lower your credit utilization rate. Experts recommend keeping your rate below 30% for approval, but below 10% will get you the best rates.
2. Request a credit limit increase
Another easy way to boost your credit score is to ask your credit card servicer to up your limit. Provided you don't charge more on the card, it will lower your overall credit utilization rate.
3. Avoid opening new lines of credit
Getting a new credit card or taking out a personal loan can negatively impact your credit in several ways: Your application will require a hard credit inquiry, which can temporarily lower your credit score. And if you're approved, the average age of your accounts will drop.
4. Check your credit reports for errors
It's always smart to monitor your credit reports for inaccuracies, whether they're honest mistakes or signs of fraud. You can use Aura, IdentityForce or another credit monitoring service to survey your reports from Experian, Equifax and TransUnion.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Credit Saint offers three packages for credit repair services and a 90-day money-back guarantee for services. It has received an A rating and is accredited by the Better Business Bureau.
The Credit People's Credit Report Repair service is relatively affordable compared to other programs in the space. Even the most basic package (the standard package) includes unlimited challenges to all three credit bureaus. Upgrading to the premium package includes escalated disputes and monthly credit score reports and score refreshes.
Mortgage FAQs
What credit score is required to get a mortgage?
For a conventional mortgage, lenders typically want a credit score of 620. However, you'll need a score of 760 for the best rates.
What kinds of mortgages are easier to get approved for?
Government-backed mortgages — like FHA, USDA, and VA loans — typically have more flexible credit score requirements than conventional loans. However, they may have other limitations: VA loans are limited to current or former service members, for example, and USDA loans are only for individuals who meet income and location requirements.
What is the lowest credit score to get approved for a mortgage?
You can qualify for an FHA loan with a score as low as 500 if you make a down payment of at least 10%. Requirements vary by lender, however.
What is a non-qualifying mortgage?
A non-qualified mortgage (or non-QM loan) doesn't have to conform to the income and credit requirements set by the Consumer Financial Protection Bureau. Non-QM loans can help people with poor credit, unusual income streams or a bankruptcy in their past get a mortgage, although interest rates may be higher.
Why trust CNBC Select?
At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content independently of our commercial team and any outside third parties, and we pride ourselves on maintaining high journalistic standards and ethics.
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
Our methodology
CNBC Select analyzed dozens of home loans offered by online and brick-and-mortar banks, credit unions and nonbank lenders to determine which were the best for borrowers with bad credit. We focused on the following features:
Credit score: We gave more weight to lenders who approved conventional mortgages for borrowers with FICO Scores below 620 and who considered nontraditional credit sources.
Government-backed loans: FHA, VA and USDA loans have more flexible credit requirements than conventional mortgages, so we favored lenders that offered some or all of these government-guaranteed loans.
Closing times: We gave more weight to lenders with shorter-than-average closing times or that guarantee an on-time closing.
Fees: The mortgage process includes origination, application, and underwriting fees, as well as appraisal, title insurance and other closing costs. When possible, we noted if a lender had lower fees, discounts or grants or if they waived certain fees.
Application process: We considered whether lenders offered an online preapproval and application process and whether they had physical branches for in-person applications.
Customer service: We favored lenders that scored highly on J.D. Power's mortgage origination and servicing surveys. We noted whether they had robust customer service phone hours and a website or mobile app with an online chat feature and educational resources.
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
Based on this criteria, our picks for the best mortgages for borrowers with bad credit are:
- Best for FHA loans: Rocket Mortgage
- Best for no credit: Guild Mortgage
- Best for non-qualifying mortgages: Carrington Mortgage Services
- Best for a quick closing: CrossCountry Mortgage
- Best for veterans: Navy Federal Credit Union
Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
