How Much of a Home Loan Can I Get With a 650 Credit Score?

Loans
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3
 Min read
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June 8, 2022

Planning to get a home loan? There are many factors to think about when you’re ready to take that step. As you may know, your credit score is one thing that mortgage lenders look at when they’re deciding whether to approve your application for a mortgage. If you know your credit score is 650, your next question may be “How much of a home loan can I get with a 650 credit score?”

Is 650 Considered a Good Score?


Credit scores range from 300 to 850 and the higher your score, the better your chances of being approved for a mortgage at the best interest rate and terms. A consumer with a credit score of 800 or higher has credit that’s considered exceptional. A consumer with a score of 740 to 799 has a score that’s usually considered very good, which is likely to help them be approved for an attractive mortgage. 

Scores between 670 and 739 are considered good. If you have a score of 650, your score falls in the next category, which is fair. Having a fair credit score doesn’t mean getting approved for a home loan is impossible, but you probably won’t get the best possible interest rate.

Other Factors Mortgage Lenders Consider

With a score of 650, mortgage lenders will look for other factors that may help your chances of getting a home loan. If you have a high income or a large down payment, these are facts that may work in your favor. They’ll consider your employment history and whether you have money saved. If you have a co-borrower, their income and credit score will also be considered.

The amount you’ll qualify for depends on your income and your debt-to-income ratio, along with how much of a down payment you have saved. They’ll evaluate the mortgage payment required for the house you’re interested in compared to your income, and they’ll also factor in other bills you have to pay monthly to see how much of a home loan you can afford. 

Conventional mortgage loans usually want a down payment of 20 percent. A 650 credit score allows you to be considered for government-backed loans through the Federal Housing Administration (FHA) and the US Department of Agriculture (USDA), which usually require a lower down payment.

Improving Your Credit Score

Since a 650 credit score makes it more challenging to get the best interest rates and terms on a mortgage, you may want to work on bringing up your score before applying for a home loan. Try to pay down your debt and reduce the amount of available credit you’re using on credit cards. If you’ve had late payments in the past, try to establish a history of on-time payments.

Check your credit reports to make sure there are no errors on them. If there’s inaccurate information on your credit reports, it could be affecting your credit score in a negative way. Reach out to Dovly, an automated credit repair engine, to find out how we can help get credit report errors corrected. Try it risk-free with our free membership tier starting today.

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