HomeHome ImprovementMinimum Credit Score Home Improvement Loan
Advertising Disclosure Acorn Finance receives compensation from some of the companies featured on our website, which may influence the presentation and order of the offers shown. Please note that not all loan options, savings products, or lenders are represented on our site.

Minimum Credit Score For Home Improvement Loan

Compare monthly payment options from several lenders in under 2 minutes.

How much would you like to finance?

What Is The Minimum Credit Score For Home Improvement Loan

Minimum credit score requirements can vary for mortgages, but you should have a credit score of 620 or better to qualify for most loans. Requirements can vary depending on the type of loan and the lender. Individuals and families looking to purchase a new home should start by determining which type of loan is appropriate.

There are conventional mortgages available through hundreds of mortgage lenders, mortgage brokers, banks, and credit unions across the country. If you are looking for a conventional mortgage, then you should have a minimum credit score of 620 before applying. Conventional mortgages typically come with lower interest rates, and if you meet the lender’s requirements, approval can be quite straightforward. Conventional mortgages are the most common mortgage type in the US.

Get Started

Compare rates from top lenders

Learn More About Minimum Credit Score For Home Improvement Loan

In addition to conventional mortgages, there are several other options available to finance a home purchase.

Read more - FAQ

What is the minimum credit score to get a house?

Conventional mortgages have a limit when it comes to single family homes. The loan limit on a mortgage for a single family home in 2022 is $647,200, and for high-cost areas like San Francisco or Hawaii, the loan limit is $970,800. Loan limits are set by county. To determine if you live in a high-cost county and therefore are eligible for a mortgage of up to $970,800, you can ask a mortgage lender or contact the FHA who is responsible for designated which counties meet the criteria of being a high-cost county.
If you are looking for a mortgage that is greater than the local loan limits set by the FHA, then you will need to find a mortgage lender who offers jumbo loans. Jumbo loans typically require higher credit scores and more income than a conventional mortgage. Although there is no official minimum credit score requirement for a jumbo loan, most lenders are going to want to see a credit score of 680 or higher. However, even with a credit score of 680, it may be difficult to qualify for a jumbo loan, therefore, you may want to strive for a credit score at least in the mid 700s. In addition to having good or excellent credit, some lenders may require a down payment anywhere between 5% and 25% depending on your credit score and your level of income.
Another option for purchasing a new home may be to explore what kinds of government-backed mortgages you may be able to qualify for. Based on your situation, you could qualify for a mortgage from the FHA, VA, USDA, the Native American Direct Loan Program, Fannie Mae, and Freddie Mac.
Let's take a look at various types of loans that allow you to get a house and what their minimum credit score requirements are.
FHA loans: FHA loans are mortgages that typically have lower down payment and minimum credit score requirements. These mortgages are designed to help people with bad credit or with lower incomes obtain financing to purchase a single family home. Most lenders require a credit score of at least 580 with a minimum down payment 3.5% to qualify for an FHA loan, however, there may be some lenders who would consider someone with a credit score between 500 and 579 who was able to come up with a minimum down payment of 10%. The maximum loan amount for an FHA loan is $822,375.
VA loans: VA loans are mortgages that are only available to veterans, current military personnel, or qualifying surviving spouses. Most lenders require a minimum credit score of 620 but some lenders may be willing to work with you even with a credit score as low as 580. Part of the process to obtain a VA loan requires that the borrower has a valid certificate of eligibility from the US government that proves they are eligible for a VA loan. Although VA loans do not require a down payment, they do require the borrower to pay closing costs.
USDA loans: USDA loans are government-insured mortgages that can help potential homeowners purchase a new home in an eligible rural area. To qualify for a USDA mortgage loan, a borrower should have a minimum credit score of 640. There is no minimum down payment requirement as well. The USDA website can be accessed to determine whether or not a particular home is eligible for a USDA loan based on its location.
Native American Direct loans: Native American veterans may obtain a loan to buy, build, or renovate a home that is located on Federal Trust Land. There is no official minimum credit score requirement, however, bad credit scores may not qualify. Similar to VA loans, Native American veterans, active military personnel, and qualified surviving spouses must obtain a COE, certificate of eligibility, from the US government before applying for the loan through their respective tribal organizations.
Fannie Mae: Fannie Mae is a government agency that can help a borrower obtain a mortgage for their home purchase. 2022 maximum loan amounts for Fannie Mae sponsored single-family home loans are $647,200 for the contiguous United States, DC, and Puerto Rico and $970,800 for Alaska, Guam, Hawaii, and the U.S. Virgin Islands. Also, the $970,800 loan limit is set for qualified high-cost areas. Fannie Mae requires different minimum credit scores based on the mortgage product being sought and the debt-to-income ratio of the potential borrower. Minimum credit score requirements can be as low as 620 or as high as 720 depending on the loan program. Some of the mortgage products that Fannie Mae borrowers may be able to qualify for include The HomeReady mortgage loan, 97% LTV options for first-time home buyers, and the HFA Preferred mortgage.
Freddie Mac: Just like Fannie Mae, Freddie Mac has numerous mortgage programs that are accessible to potential borrowers to help them purchase a new home. Although Freddie Mac loan programs are designed to help low-income borrowers and first-time home-buyers purchase homes, they still may require credit scores of 620 or 660 depending on the program. Some of the programs available through Freddie Mac include Home Possible, HomeOne, Super Conforming Mortgages, Manufactured Homes Mortgages, Affordable Seconds, CHOICEHome Mortgages, and many more.
Whether you are looking for a conventional mortgage or through a mortgage lender or broker, or you are looking for a government-backed home mortgage, having a credit score of 620 or higher may put you in the best position to qualify. For credit scores below 620, you may want to consider working with the FHA to obtain an FHA home loan.

What is a good credit score to buy a house nowadays?

Nowadays credit score requirements seem to be more relaxed. You can qualify to finance a home with only a 620 credit score. Whether you are looking for a conventional loan through a mortgage lender or a mortgage broker, or you are looking to explore some of the first-time home-buyer programs that Freddie Mac and Fannie Mae have, a credit score of 620 seems to be a good baseline.
Although 620 is a good baseline credit score to buy a house, you really should want to have the best credit score possible before applying for a mortgage of any type. A higher credit score can make the qualification process easier as well as help you to lock in some of the lowest mortgage rates available. Mortgages can typically come with 15 or 30-year repayment periods. Qualifying for the lowest interest rate possible due to having the best credit score can save you thousands of dollars over the life of the mortgage. You can always try to refinance sometime down the road if you improve your credit score, however, you may want to consider improving your credit score as much as possible before applying for a mortgage.

What credit score do I need for a home improvement loan?

Home improvement loans are typically for lower amounts than mortgages and they come with a much shorter repayment period. Because of this, you may be able to qualify for a home improvement loan with a minimum credit score of 600 whereas you may need a 620 for a mortgage. Home improvement loans typically come with higher interest rates than mortgages and sometimes they can come with an origination fee. This is why it is equally as important to try to improve your credit score to the highest possible level before applying for a home improvement loan.
The key to finding a home improvement loan with the best interest rates is to plan ahead. You should start thinking about your financing options for a home improvement project a minimum of six months before you are planning to break ground on the project. Six months before your home improvement project, you may want to obtain a copy of your credit report to see where you stand in terms of credit score. If you are not satisfied with your credit score or if your credit score is well below 600, then you can take the following 6 months to improve your credit before applying for a home improvement loan. You can improve your credit by paying down any credit cards or loans to decrease your credit utilization ratio and by taking care of any accounts you may or may not have in collections. Other than taking care of delinquent accounts and paying down debts, for the time leading up to when you will apply for a home improvement loan, you should absolutely make every payment to every creditor you have on time as well as avoid opening any new lines of credit. Addressing the above-mentioned credit concerns may help boost your credit score and help you qualify for a home improvement loan with a lower interest rate and fewer fees.
If when you check your credit report you are satisfied with your score and you see no room for improvement, then you may consider starting your project sooner or using the following six months to save as much money as possible. If you can save up enough money to pay a significant portion of the home improvement project out-of-pocket, you can save hundreds or thousands of dollars in interest and you will not need to borrow as much. Also, during this time, you can work with a designer, find a contractor, talk to your homeowner's insurance company, and secure all the proper permits you need for the project. It is almost better to have a good amount of time to prepare for a home improvement project than rush it. The extra time can make a world of difference in helping you plan, find the best contractor, and ensure your home improvement project is exactly how you envision it.
A minimum credit score of 600 is where some lenders start their minimum credit score requirements for homeowners looking for a home improvement loan. That being said, some lenders may require much higher credit scores, and in return, they may be able to offer some of the best interest rates on the lending market.
If you have a credit score below 600 but you are looking for a home improvement loan sooner rather than later, then you may want to consider finding a lender who works with bad credit borrowers. Some lenders may be willing to work with a homeowner with a credit score as low as 560. Other options you may want to consider if your credit score is below 600 include secured loan options and an FHA 203k rehabilitation loan.

Can I get a renovation loan with bad credit?

Yes, there are still renovation loans available to borrowers with bad credit. Some lenders may even specialize in working with individuals who have less than perfect credit. However, if you do find a lender that is willing to work with you and extend you a home improvement loan, you should expect to pay higher interest rates and more fees than good credit borrowers. Aside from finding lenders who work with bad credit borrowers, you may want to explore secured loan options.
A secured personal home improvement loan may be a good option for a bad credit borrower looking to finance renovations or home repairs. A secured personal loan allows a borrower to use an asset as collateral, find a cosigner, or have a co-borrower help them improve their chances of qualifying for the loan amount they need. Although secured personal home improvement loans may be a viable option for some bad credit borrowers, other secured loan types like home equity loans, home equity lines of credit, and cash-out refinances may require a higher credit score of 620 or more.
Another option to explore if you are a bad credit borrower looking for a renovation loan is to consider an FHA loan. The FHA 203k rehabilitation loan program can be an option for someone with a credit score above 580 who also has a 3.5% down payment. Additionally, some lenders may let borrowers with a credit score as low as 500 qualify for an FHA 203k rehabilitation loan if they have a minimum down payment of 10%. Because FHA loans are government-insured, some lenders are willing to lower their credit score requirements.

What credit score do I need for a $35,000 loan?

Someone looking for $35,000 should have a credit score of at least 620, although it may really take a higher score than that to qualify. $35,000 is on the larger side for a personal loan so in addition to a good credit score, lenders will likely want to see a low debt-to-income ratio and a healthy income.

Can I get a loan with a 620 credit score?

Yes, a credit score of 620 is a great baseline credit score that may allow you to access more loan options than if your score was lower. When it comes to personal home improvement loans, having a credit score of at least 620 can help you qualify for more competitive interest rates. When it comes to other types of loans like home equity loans, HELOCs, cash-out refinances, and certain government loan programs, often a credit score of 620 or more is required to be even considered for approval.

Is a home improvement loan tax deductible?

Any interest that is paid on a personal home improvement loan is not tax-deductible. However, interest paid on mortgage-based renovation loans is tax-deductible.

How do you know how much equity you have in your home?

Finding out how much equity you have in your home is quite easy. First, if you need exact figures, you may need to have an appraisal done on your home. If you are just looking for a rough estimate, then you can use a real estate website like Zillow or Trulia to find the estimated value of your home. Once you have a general idea of your home's value, then simply deduct the balance of your mortgage from the total value of your home. Whatever is left over is your home's equity. If you have a second mortgage or a personal loan that uses your house as collateral, you will have to deduct those balances as well.

What credit score do you need for a $350,000+ house?

To qualify for a $350,000 house, you should have a minimum credit score of 620, although in some cases, you may need a higher score. Before shopping for a new home, you should get prequalified to determine if you are able to purchase at this time.

Explore Loans by Credit Score:
500 Credit Score Personal Loans
510 Credit Score Personal Loans
520 Credit Score Personal Loans
530 Credit Score Personal Loans
540 Credit Score Personal Loans
550 Credit Score Personal Loans
560 Credit Score Personal Loans
570 Credit Score Personal Loans
580 Credit Score Personal Loans
590 Credit Score Personal Loans
600 Credit Score Personal Loans
610 Credit Score Personal Loans
620 Credit Score Personal Loans
630 Credit Score Personal Loans
650 Credit Score Personal Loans
680 Credit Score Personal Loans
700 Credit Score Personal Loans
730 Credit Score Personal Loans
750 Credit Score Personal Loans
800 Credit Score Personal Loans

$ Loan Calculator


Find the loan you're looking for

Table comparing monthly payments, APRs for approved personal loans.
See your options
Take a few minute to answer few questions, and we'll match you with the right range of lenders to consider
Choose your loan
Find your favorite marketplace of offers and apply directly with the lender you prefer
Do your project
If you're approved, use your funds to cover all your costs now, and pay the lender back month by month

What can I do with a $2,000 personal loan?

A $2,000 personal loan has a number of uses, including (but not limited to):
Home improvement Buying a car Wedding costs
Debt consolidation Medical bills Startup business costs

Still have questions?

One home, endless possibilities


Personal Loan Information