Can I get a mortgage with bad credit?
Yes. FHA loans accept 580+ FICO with 3.5% down (500+ with 10% down). Non-QM and DSCR programs go further down for specific scenarios.
Bad credit does not disqualify you from a mortgage. The product just changes. FHA is the most credit-flexible agency loan: 580+ FICO with 3.5% down, or 500-579 FICO with 10% down. VA loans (eligible veterans) commonly accept 580+ at participating lenders even though VA itself sets no minimum. USDA accepts 640+ at most lenders. Conventional loans require 620+, with best pricing at 740+. Below 580 FICO you move into specialty non-QM programs (bank statement, asset-qualifying, ITIN) at higher down payment and rate. Recent credit events (bankruptcy, foreclosure) require seasoning: FHA is 24 months past Chapter 7 bankruptcy / 36 months past foreclosure; conventional is 48 months / 84 months; non-QM lenders go shorter (12-24 months) with higher rate. Building credit before applying typically saves more in monthly payment than waiting costs in time. Pay down revolving balances below 30% utilization, dispute incorrect items, and avoid new accounts in the 6 months before applying.
People also ask
What FICO score do I need for FHA?
FHA officially accepts 500 FICO. Most lenders set a 580 minimum because the 500-579 band requires 10% down and is harder to insure. Many lenders set 620+ as their floor.
Will my credit score drop when I apply?
A mortgage credit pull (hard inquiry) typically drops FICO by 2-5 points temporarily. Multiple mortgage inquiries within 14 days count as one inquiry under FICO's rate-shopping window.
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Bank Statement
Bank statement mortgages qualify self-employed borrowers using 12 or 24 months of personal or business bank deposits. No tax returns. Up to 90% LTV.
Asset-Qualifying
Asset-qualifying (asset depletion) mortgages let high-net-worth borrowers qualify using liquid assets in lieu of income. Ideal for retirees and investors.
FHA Loan
Government-insured mortgage with low down payment (3.5%) and flexible credit (580+ FICO). Insured by HUD.
VA Loan
Mortgage guaranteed by the Department of Veterans Affairs for eligible veterans and active-duty service members. Zero down, no monthly mortgage insurance.
Qualified Mortgage (QM)
A category of mortgages meeting CFPB safety standards: limits on points/fees, no risky features, and a verified ability-to-repay analysis.