How to Get a Mortgage with Bad Credit

Having bad credit doesn't mean homeownership is out of reach — but it does mean you need a strategy. Here's what you need to know.

Minimum Credit Score Requirements by Loan Type

• FHA Loan: 580 minimum (3.5% down) or 500 with 10% down
• VA Loan: No official minimum, but most lenders want 620+
• Conventional Loan: 620 minimum, best rates at 740+
• USDA Loan: 640 minimum for most lenders

Steps to Take Before Applying

1. Pull your credit reports. Get free reports from all three bureaus at AnnualCreditReport.com. Look for errors, outdated information, and accounts that shouldn't be there.

2. Dispute inaccurate items. Under the FCRA, you have the right to dispute anything inaccurate, incomplete, or unverifiable. This is where CreditGM can help significantly — professional disputes often get faster results.

3. Reduce your credit utilization. If your credit cards are near their limits, paying them down can quickly boost your score. Aim for under 30% utilization on each card.

4. Don't open new accounts. New credit inquiries temporarily lower your score. Hold off on any new credit applications while you're preparing to get a mortgage.

5. Consider rapid rescoring. If you're in the middle of a mortgage process and need a quick score boost, ask your lender about rapid rescoring after making positive changes to your accounts.

How Long Does It Take?

Most clients who work with CreditGM see meaningful score improvements within 3–6 months. For mortgage qualification, we recommend starting the credit repair process at least 6 months before you plan to apply for a loan.

CreditGM's Mortgage Ready plan ($199/mo) is specifically designed for homebuyers who need to qualify for a mortgage. It includes priority processing and lender-specific credit optimization.