The Credit Score Misconception That’s Stopping Buyers From Getting Started

Many would-be homebuyers aren’t on the sidelines by choice—they’re there because they believe they don’t qualify, often due to concerns about their credit score.

A Bankrate survey found that 42% of Americans believe excellent credit is required to qualify for a mortgage. That misconception helps explain why many renters say their credit is the reason they haven’t bought yet.

You might be feeling the same way—checking your credit score, seeing it’s not where you’d like it to be, and deciding homeownership isn’t realistic right now. But here’s the important part: despite what many people believe, perfect credit isn’t required to buy a home.

You don’t need perfect credit to buy a home

So where does this misconception come from? Part of the confusion is that today’s typical buyer does tend to have a strong credit profile. According to New York Fed data, the median credit score for homebuyers is 775.

That doesn’t mean your credit score needs to be that high to qualify. Recent buyer data shows that many homebuyers secured mortgages with scores well below the median. In fact, about 10% of buyers had credit scores around 660—meaning some were higher, some lower, but the midpoint of that lowest group landed near that range (see graph below).

A lower-than-expected credit score doesn’t automatically disqualify you. FICO explains that lenders don’t all use the same cutoff score when approving mortgages. Each lender applies its own criteria and evaluates multiple factors when determining eligibility.

“Although credit scores like FICO are commonly used in mortgage decisions, lenders apply their own criteria and risk thresholds. There is no single credit score requirement across all lenders, and approval often depends on multiple factors."

That’s why speaking with a knowledgeable lender matters. With a meaningful number of buyers qualifying in the 600-score range, it’s worth exploring what may be possible in your situation.

Bottom Line

Your credit score matters—but it doesn’t need to be perfect.

If credit has been the reason you’ve been waiting to buy a home, it might be time to take another look at your options. If you want help understanding where you stand and what your next step could be, connect with a local lender.

If concerns about credit have kept you on the sidelines, it may be worth revisiting what’s actually possible. A quick conversation with a local lender can help you understand where you stand and what your next step could be.

You don’t need all the answers to start the conversation.

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