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Can You Buy a House With a 639 Credit Score?

A 639 credit score is considered fair and qualifies for most loan programs. But here's why it can be worthwhile to improve it.

March 8, 2022
March 8, 2022
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You can buy a home with a 639 credit score, especially if you have a steady income and relatively low monthly debts.

But if you boost your credit score by even a few points, you could qualify for a better interest rate, more loan programs, and homebuying assistance.

Is a 639 credit score good or bad?

A 639 credit score is about average.

FICO scores, which is what lenders look at when you buy a home, take out an auto loan, or apply for just about any kind of financing, break down like this:

  • Poor: 580 and below
  • Fair: 580-669
  • Good: 670-739
  • Very good: 740 – 799
  • Exceptional: 800 and above

A 639 FICO score is solidly average, and it meets the minimum credit score requirement for most loan programs. But the higher your credit score, the stronger a borrower you’ll appear to lenders. And even a modest increase in your score can open the door to lower rates and better homebuying options.

For instance, the USDA does not set a minimum FICO score requirement for its 0% down home loan program, but lenders set their own minimums between 620-640. Whether you qualify for this loan options with a 639 credit score depends on the lender.

And some down payment assistance (DPA) programs*, which can provide grants or forgivable loans you can use to buy a home, have minimum credit score requirements as well. In Florida, for example, DPA requirements begin at 640 (but the eligibility requirements vary widely by program and state).

In short, a strong credit score and credit report can create more opportunities for you as a homebuyer.

How improving your credit score can help you get a better interest rate

Your credit score is just one factor in qualifying for a mortgage and a good interest rate, but it is an important one.

FICO scores represent your credit history, including whether you’ve paid your bills on time, how much debt you’re carrying, and whether you’ve defaulted on a loan in the past. Several factors influence your FICO score, including:

  • Payment history
  • Credit utilization ratio (how much of your credit is currently in use)
  • Credit mix (how many different types of credit you have)
  • Age of credit (how long your accounts have been open)
  • New credit accounts

A high score indicates reliability and good money management skills. Lower scores can indicate that a borrower is at higher risk of falling behind or defaulting on their mortgage.

If you have defaulted on a loan before, or you’ve been through a bankruptcy or have late payments on your credit report, you can still buy a house. You can qualify for a low down payment loan with a credit score as low as 580, and your lender may simply ask for a letter of explanation if you’ve had a past credit issue.

Raising your score 1 point can make a difference

If you’re able to raise your credit score, you may be able to get a better interest rate based on Fannie Mae’s loan level price adjustments (LLPAs). LLPAs refer to interest rate brackets based on a person’s FICO score.

Someone with a 639 score will pay a higher rate and/or fees because they didn’t quite reach the 640 bracket, if they are opting for a conventional loan.

The extra cost amounts to 0.50% of the loan amount. That’s an extra $1,500 in fees on a $300,000 mortgage. The buyer may accept a higher rate in lieu of the fees.

Following are all the credit tiers when getting a conventional loan:

  • 620 or lower
  • 620-639
  • 640-659
  • 660-679
  • 680-699
  • 700-719
  • 720-739
  • 740 or higher

The higher tier you can reach, the better chance you have of getting a good rate. Credit score isn’t the only factor that affects your interest rate, but working on your score is a solid start, especially since interest rates are rising generally.

But, if you’re ready to buy a home now and you have a 639 credit score, don’t let that deter you.

"Buyers do not need to wait to purchase if they have a 639 credit score. There are many factors that influence the approval of a loan, with the credit score being just one of them."

Jeff Satre, mortgage manager

“Buyers do not need to wait to purchase if they have a 639 credit score,” says Jeff Satre, a mortgage manager with Fairway in Ashburn, Virginia. “There are many factors that influence the approval of a loan, with the credit score being just one of them. The difference between a 639 and 640 score will probably be negligible.”

How to improve your credit score for a mortgage

The key to improving your credit score is consistently following these behaviors:

What kind of mortgage can you get with a 639 credit score?

The minimum credit score needed to buy a house varies by the type of mortgage you choose, though 639 puts you in range of most.

Loan TypeMinimum credit score requirementConventional loans620 (3% down payment minimum)FHA loans (government backed)580 with 3.5% down (500 with 10% down)VA loans (government backed)**580 (no down payment required)†USDA loans (government backed)**620 (no down payment required)**Minimum credit score requirements for USDA and VA loans are set by lenders, not the USDA or VA. The figures show are requirements for Fairway Independent Mortgage Company.

Conventional loans are the most common type of mortgages, though government-backed loans have many advantages as well.

“FHA loans allow you to have a credit score of 580 or higher and still be able to put only 3.5% down,” says Garett Seney, a mortgage advisor with Fairway in south Boston. “If you are comfortable with the monthly payment, utilize the FHA program – which in many cases will be a better monthly payment than if you waited to go with a conventional loan and a 640 score.” 

You’d need to be a military veteran or active-duty servicemember to buy through the VA loan program, and USDA Guaranteed loans go to low- to moderate-income borrowers in qualifying rural and suburban areas.

One drawback to using an FHA or USDA loan is that both have an upfront and annual mortgage insurance requirement. In most cases, these fees last for the life of the loan.

Conventional loans have an annual private mortgage insurance requirement if you put down less than 20%, but you can request that it be removed once you have 20% equity in the home.

If you take out a USDA or FHA loan, you can refinance to a conventional loan with no mortgage insurance after you reach 20% equity.

VA loans have an upfront funding fee, but no annual mortgage insurance requirement.

Frequently asked questions

Is 639 a good credit score? A 639 credit score is considered “fair credit.” It meets the minimum credit score requirement for most home loan programs, though raising your score may help you get a better interest rate.

How can I quickly raise my credit score? If you have errors in your credit history, disputing them can help raise your score quickly. Otherwise, you’ll need to build a strong credit foundation through good habits over time. A history of on-time payments, keeping balances low, and paying down large balances can all help improve your credit score.

What credit score do I need to buy a house in 2022? The minimum credit score requirements for buying a house in 2022 are:
Conventional loan: 620
FHA: 580 with a 3.5% down payment; 500 with a 10% down payment
VA loan: 580**
USDA loan: 620**

**Minimum credit score requirements for USDA and VA loans are set by lenders, not the government agencies. The figures show are requirements for Fairway Independent Mortgage Company.

You’ve got options with a 639 credit score

If you have a 639 credit score, you could buy a house now, so it’s worth talking to a lender. You’ll also need to meet the debt-to-income ratio*** (DTI) requirements, as well as have sufficient income and fulfill all of the other eligibility criteria to get approved for a loan.

And if you’re worried about what your interest rate will be or which loans you can get, know that raising your score is entirely achievable.

“Increasing your qualifying credit score for the best possible interest rate and term can be as simple as paying down a credit card balance, paying off and getting an outstanding collection deleted, or opening a new credit card,” says Stacey Sprain, credit educator and senior vice president of Creditool and vendor services at Fairway.

Your lender may also be able to work with you to raise your credit score quickly to put you in a better position to buy a home.

Fairway is not a registered or licensed credit repair organization.

*Eligibility subject to program stipulations, qualifying factors, applicable income and debt-to-income (DTI) restrictions, and property limits. Fairway is not affiliated with any government agencies.A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits. ***Debt-to-income (DTI) ratio is monthly debt/expenses divided by gross monthly income.

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