What Loan Can I Get with a 620 Credit Score?

What You Get with a Credit Score of 620 

For those hovering around a 620 credit score, the landscape of home loan options is diverse. In this post, we'll dive into the types of loans you might be eligible for with this credit score. Remember that this is a general overview, and it is always best to seek advice from a qualified mortgage professional. That said, let's look at what a 620 credit score means for you in buying a home!

Overview of Loan Options

A credit score of 620 opens the door to the "big four" major loan types, each with its unique benefits and requirements. This includes USDA, VA, Conventional, and FHA loans. Each of these loans is designed differently.

USDA Loans

Ideal for rural homebuyers, these loans offer competitive interest rates but might have stricter guidelines for eligibility.

VA Loans

Available to veterans and active military members, offering excellent terms like no down payment and no private mortgage insurance (PMI).

Conventional Loans

These require higher credit scores for the best terms but offer flexibility in property types and loan terms.

FHA Loans

Popular for their lower down payment and credit score requirements, making them a favorable option for many first-time homebuyers.

With a credit score of 620, these are all theoretically available. But that doesn't mean they're equally available or beneficial. 

USDA and Conventional Loans

Although a 620 score is a starting point with USDA and Conventional loans, better terms are often reserved for higher scores. These will also most likely require some other “qualifying factors” to go with that score, like a lower debt-to-income ratio, higher down payment, etc.

Both loan types are accessible with a 620 score, but the specific terms and your eligibility will depend on a variety of factors.

FHA and VA Loans

On the more lenient side of things, we have FHA and VA. Generally speaking, 620 is a good enough credit score to put you in a good spot with these loan programs. 

FHA allows for a 3.5% down payment. If you’re a veteran or active military member, the VA Loan that is available to you offers 0% down. 

While 620 doesn’t necessarily make you king of the world, it definitely affords you some respectable options with FHA and VA, both of which are designed to make homeownership more accessible. 

Beyond Credit Scores

While your credit score is a significant factor in determining loan eligibility, it's crucial to remember that it's not the only one. Lenders also consider a variety of other financial aspects, including but not limited to:

  • Income and Employment History 
  • Debt-to-Income Ratio 
  • Assets and Savings

Understanding that your financial picture is multifaceted and not solely defined by your credit score is essential in getting where you want to go with homeownership. 

For this reason we highly recommend speaking with a Loan Officer if you’re even thinking about buying a house soon. A good-hearted, professional Loan Officer can help you use the time that you’re not shopping around to improve your ‘financial picture’ so once you are ready, there are even more loan products and better terms available to you. 

Modern mortgage professionals also have powerful credit simulators that show a significantly clearer picture of where you’re at with your finances and how that compares to where you want to be. 

If you’re based in Southeast Michigan and you’d like to reach out to Greg Goddard, his contact info is:

Greg Goddard
(734) 915-2332


Thanks for reading, and we encourage you to check out the full credit-focused podcast episode with Greg here: 

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