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Think your credit is too low to get a mortgage? You might be closer to qualifying than you think. There are plenty of lenders out there that accept low or bad credit scores, and many even have flexible requirements for borrowers who have recent negative credit events like bankruptcies or foreclosures.
The Best Mortgage Lenders for Low or Bad Credit Scores
Carrington Mortgage Services FHA mortgage - Product Name Only : Best overallGuild Mortgage FHA mortgage - Product Name Only : Best for those with no credit historyNew American Funding FHA mortgage - Product Name Only : Best for a variety of optionsRocket Mortgage FHA mortgage - Product Name Only : Best for an easy online experienceCitibank Mortgages FHA mortgage - Product Name Only : Best for low down paymentsCashCall Mortgage FHA mortgage - Product Name Only : Best for self-employed borrowersCrossCountry Mortgage Mortgages - Product Name Only : Best for no minimum credit score
Here are the best mortgage lenders for borrowers with low credit scores.
Compare the Best Mortgage Lenders for Low or Bad Credit Scores
Low or Bad Credit Score Mortgage Lenders Frequently Asked Questions
What is the lowest credit score allowed for a mortgage?
A credit score of 500 is generally the lowest score you could get a mortgage with, and you'll need to find a lender that allows these types of mortgages. You'll likely need a large down payment to get a mortgage with a score this low.
Can I get an FHA loan with a 500 credit score?
Yes, you may be able to get an FHA mortgage with a credit score as low as 500 — but you'll need a 10% down payment. This is in contrast with getting an FHA mortgage with a 580 credit score and 3.5% down payment.
What is the easiest mortgage to qualify for?
An FHA mortgage is usually the easiest home loan to get. You can qualify with a credit score as low as 580 (with a 3.5% down payment) or even 500 (with a 10% down payment). You can also usually qualify for an FHA mortgage with more debt than with a conforming mortgage.
How does alternative credit data work?
Many of the lenders on our list allow alternative credit data, also known as non-traditional credit. You can show proof of paying bills like rent, utilities, and insurance on time, and this provides evidence that you are financially reliable even though you don't have a traditional credit score.
Should I get a mortgage with a low credit score?
It depends on your situation. A poor credit score is sometimes a sign of larger financial issues — maybe your score is low because you don't pay your bills on time or because you have a lot of debt. In these cases, adding another payment and form of debt by taking out a mortgage may not be a great idea.
Getting a mortgage with a low credit score can also be expensive. The lower your score, the higher your rate will be to compensate for the risk the lender is taking.
But if you feel confident that you can afford monthly payments and are working to improve your credit score, it may be a good time to buy a home.
Low Credit Score Mortgage Lender Reviews
Best Overall for Low Credit Scores
Carrington Mortgage Services
Carrington Mortgage Services is our top choice for borrowers with low scores. It allows credit scores as low as 500 on some of its government-backed mortgages, and has options for borrowers with recent negative events on their credit reports.
Carrington's standout feature is its Carrington Flexible Advantage mortgage, which accepts borrowers who have recent negative credit events, such as a foreclosure or bankruptcy, on their credit reports. The minimum credit score for this mortgage is 550.
Carrington's FHA and VA mortgages allow credit scores as low as 500.
What to look out for: Carrington doesn't lend in Massachusetts or North Dakota. It also doesn't show its rates online.
Carrington has an NR, or "no rating" from the BBB because the lender is in the process of responding to previously closed complaints. Additionally, in November 2022, the Consumer Financial Protection Bureau ordered Carrington to pay $5.25 million in fines for supposedly violating borrowers' CARES Act rights. The CFPB claims that the lender misled borrowers seeking CARES Act forbearance and denied them key protections provided by the pandemic-era law.
Best for Those With No Credit History
Guild Mortgage
Guild Mortgage is a great choice both for borrowers with low credit scores and those with no credit score. Guild allows credit scores as low as 540 on its FHA and USDA mortgages. It also accepts non-traditional credit from borrowers who have no credit history through Guild's Complete Rate program, which is available on its FHA, VA, and USDA mortgages.
Guild can also help connect you with down payment assistance programs in your county. It ranked above average in customer satisfaction on J.D. Power's 2022 study of mortgage originators.
What to look out for: Guild doesn't display rates online, so you'll need to apply for preapproval or talk to a loan officer to get an idea of what rate you might get.
Best Low-Credit Score Mortgage for a Variety of Options
New American Funding
New American Funding is an affordable option for borrowers thanks to its variety of mortgage options and flexible credit requirements on its government-backed mortgages.
The minimum credit score for its FHA, VA, and USDA loans is 580, though borrowers may be able to go lower with compensating factors. This lender also accepts non-traditional credit (such as proof of rent or utility payments) from those who have no score.
Additionally, its I CAN mortgage lets borrowers choose any term length between eight and 30 years. However, you'll need at least a 620 credit score to qualify for this mortgage.
What to look out for: New American Funding doesn't originate mortgages in Hawaii or New York. It also doesn't offer a way to see personalized rates online, though it does display a few sample rates.
Best Low-Credit Score Mortgage for an Easy Online Experience
Rocket Mortgage
Rocket Mortgage is a good option if you want a smooth online experience and prioritize customer support. This lender requires a minimum credit score of 580 for its FHA and VA mortgages.
Rocket Mortgage ranked as the top lender for customer satisfaction from J.D. Power in 2022. Rocket Mortgage offers a quick and easy online experience, with live online chat.
Rocket also recently started offering a few different affordable mortgage options, including its ONE+ mortgage, which combines a 1% down payment with a 2% grant from the lender.
What to look out for: Its loan options are relatively limited, and it doesn't have any in-person branches. You'll also need to earn 80% or less of the area median income to qualify for a ONE+ mortgage.
Best Low-Credit Score Mortgage for Low Down Payments
Citibank
Citibank is an affordable option for borrowers looking for a mortgage that accepts non-traditional credit. The lender's HomeRun mortgage allows 3% down with no mortgage insurance requirement, meaning you'll save money each month on your mortgage payments. You can also use non-traditional credit to apply for one of these loans, though you'll need to put at least 5% down if you plan to do so.
Citibank doesn't list its minimum FHA score requirements online, but you may be able to get a mortgage with a score as low as 580 if your finances are otherwise in good shape, according to a loan officer we talked to
Citibank earned the No. 3 spot in J.D. Power's 2022 customer satisfaction study.
What to look out for: Citibank has an F rating from the BBB due to unanswered and unresolved complaints.
Best Low-Credit Score Mortgage for Self-Employed Borrowers
CashCall Mortgage
CashCall Mortgage is a good choice for self-employed homebuyers with lower scores. Its bank statement loans let borrowers use their bank statements to document their income, while its 1099 earner loans accept 1099 forms as documentation, with no tax returns required. Both of these mortgages allow credit scores as low as 600.
What to look out for: CashCall doesn't lend in New York, Connecticut, Delaware, Maine, Maryland, Massachusetts, Wyoming, or Missouri. You'll need to talk to a loan officer or apply for a mortgage to get a personalized rate quote.
Best Low-Credit Score Mortgage with No Minimum Credit Score
CrossCountry Mortgage
CrossCountry Mortgage is a good option for borrowers looking for a flexible mortgage lender. In addition to having no minimum credit score requirement on its mortgages, it also accepts non-traditional credit (such as rent payment history) from borrowers who have no score.
What to look out for: CrossCountry ranked below average in J.D. Power's annual customer satisfaction study.
How to Choose a Low Credit Score Mortgage Lender
Finding the right mortgage lender when you have a low credit score can be tricky. While there are lenders that work with borrowers who have low scores, you want to make sure their offerings are affordable.
Getting rate quotes and asking about lender fees is important for all mortgage borrowers, but it's especially vital if you have less-than-ideal credit. Though you may pay a higher rate due to your lower score, you want to make sure you're not being charged an unfairly high rate or paying a bunch of unnecessary fees.
Comparing offers from multiple lenders will give you a better idea of what types of rates are available to you, and help you save money in the long term.
Other Mortgage Lenders We Considered
- Guaranteed Rate: Those with no credit score may be able to get a mortgage with Guaranteed Rate using non-traditional credit. But it says you'll need a "favorable credit score" to get an FHA mortgage.
- Wells Fargo: Though this lender offers a few different affordable mortgage options, it earned a below average customer satisfaction score from J.D. Power and has dealt with several controversies in recent years. It has an F rating from the BBB.
- Mr. Cooper: Mr. Cooper ranked low in customer satisfaction in J.D. Power's 2022 study.
- Truist: You may be able to qualify using non-traditional credit with Truist. But it doesn't have as many standout features as some of our other favorites.
- Freedom Mortgage: Freedom Mortgage received a low ranking in customer satisfaction from J.D. Power.
- LoanDepot: LoanDepot scored above the industry average in customer satisfaction in J.D. Power's annual study, but it doesn't have any flexible credit requirements.
- Flagstar Bank: This bank has an A+ from the BBB, but doesn't have flexible credit requirements.
- Pennymac: Pennymac is another lender that ranked low in customer satisfaction in J.D. Power's annual study.
- Paramount Bank: This bank offers FHA loans, but doesn't show interest rates on its site.
- Regions: Regions offers FHA loans, but this bank only has branches in certain parts of the US.
Why You Should Trust Us: Experts' Advice on Choosing the Best Mortgage Lender for Low or Bad Credit Scores
Insider
To help you learn more about homebuying, mortgages, and lenders, four experts weighed in:
- Anthony Park, author of "How to Buy Your Perfect First Home"
- Lauryn Williams, certified financial planner, founder of Worth Winning Financial Planning
- Julie Aragon, mortgage broker, founder of Aragon Lending Team
- Molly Grace, mortgage reporter at Personal Finance Insider
Here's their advice about how to evaluate mortgage lenders, and how to decide which type of mortgage is best for you. (Some text may be lightly edited for clarity.)
What factors should someone take into consideration when choosing a mortgage lender?
Anthony Park, author:
"The canned answer is to just go with the lowest rate. However, you also want to take into account who's going to serve your loan best. Are repayments going to be easy for you? Who is most likely to be able to help you if you need to take out a HELOC or refinance later, versus somebody who's more of a one-off type?
"They may have the lowest rates to get you involved, but they might have very, very little hand holding after the fact. I wouldn't recommend paying an exorbitant amount more for potential services in the future, but just don't always necessarily go with the rock-bottom lowest rate. There's sometimes a cost with that."
Molly Grace, Personal Finance Insider:
"Remember that you're not just choosing a mortgage lender — you're also building a homebuying team. To snag the home you want in this competitive market, you need a lender that can move quickly and has good communication with you and your real estate agent.
When I was looking for a house, I was able to text my loan officer (whom my real estate agent recommended) and get quick replies when I had questions or needed an updated preapproval letter for an offer. As you compare lenders, pay attention to how responsive they are, and ask your agent if they have any experience with the lenders you're considering."
How can someone decide between a conventional mortgage vs. a government-backed mortgage?
Molly Grace, Personal Finance Insider
"An FHA mortgage is a really helpful option for borrowers with low scores or kind of rocky credit histories. But if you have great credit, you may get a better rate and pay less for mortgage insurance on a conventional mortgage.
VA mortgages are really great deals. If you qualify for one, you should definitely go for it. You get zero down with no mortgage insurance — plus some of the best rates available."
Julie Aragon, Aragon Lending Team:
"The most common government loan that's widely available to almost everyone is the FHA loan. There's a couple of reasons why somebody would go with FHA instead of conventional one. Their credit is a little on the crummy side, let's say below 700. You can get conventional with down to a 620 score, but the mortgage insurance gets really expensive. FHA doesn't discriminate — no matter how perfect or crappy your credit is, the mortgage insurance is the same."
How can someone know whether they're financially ready to buy a home?
Lauryn Williams, CFP:
"You should have funds left over after everything is said and done as it pertains to purchasing the home. So if you don't have an emergency fund plus a down payment, you're probably not ready to purchase a home. Another thing I think about is credit card debt. While you can be approved for a mortgage with credit card debt and student loans and very little cash on hand, you put yourself in a very risky situation."
Molly Grace, Personal Finance Insider
"You have to be ready to dedicate a chunk of your budget to homeownership — and I don't mean your mortgage payment. When you own your house, there's always something that needs taking care of, especially in the first year. We got to our new house on moving day to find that the A/C was out. We paid $700 to have it fixed."
Methodology: How Did We Choose the Best Low Credit Score Lenders?
In choosing the best mortgage lenders for low credit scores, Personal Finance Insider looked for lenders that:
- Offer mortgages that allow scores below 620, including FHA mortgages.
- Have flexible credit requirements on one or more of their mortgage products — this could include accepting non-traditional forms of credit (such as proof of rent payments in lieu of a formal credit history) or considering borrowers who have negative events (such as a bankruptcy or foreclosure) on their credit reports.
FHA mortgages can be a great option for those with lower scores, but some lenders that offer these mortgages require higher scores than the minimum of 580 (or 500 with a 10% down payment). Some lenders, for example, require scores of 620 across the board, regardless of the specific loan type. All of the lenders on this list allow scores of 600 or lower on their FHA mortgages.
Many of the lenders we included also have their own specialty mortgage products that allow scores below 620, such as Carrington's Flexible Advantage mortgage.
We also looked at the following:
- Customer satisfaction. If the lender appeared in the J.D. Power 2022 Mortgage Origination Satisfaction Study, we looked at its ranking. If it wasn't in the survey, then we read online customer reviews.
- Ethics. Most our top picks received an A+ from the Better Business Bureau, which measures companies' trustworthiness. The exceptions are Carrington, which has an NR ("no rating"), New American Funding, which has an A, and Citibank, which has an F. We also researched and considered any scandals in the past three years.
Rocket Mortgage is the only lender on our list that does not have flexible credit requirements. But we still included it because it thrives in other areas, like customer satisfaction.
See our full methodology for evaluating mortgage lenders »