Your credit score tells lenders how likely you are to pay back the money you borrow. A high score sends all the right signals, while a low credit score, sometimes referred to as “bad credit,” can keep you from getting approved.
The credit score needed for a mortgage depends on the type of loan. Government-backed loan programs — FHA, VA and USDA — generally have lower credit-score requirements than conventional mortgages. But it’s the lender that ultimately decides what the minimum credit score will be for each loan product.
If your credit score is at or near lenders’ minimum, they could demand a bigger down payment, charge a higher interest rate or require you to pay more fees. In short, you could end up paying more for your home loan. The best way to avoid these penalties is to elevate your credit score before you apply.
If you have less-than-ideal credit, you’ll need a lender that’s equipped to handle it. NerdWallet has picked some of the best mortgage lenders for borrowers with low credit scores so you can quickly decide which one is right for you.
Best overall mortgage lenders for borrowers with low or bad credit
Ideal for those seeking a fast and automated way to get a loan. JG Wentworth offers FHA, VA and USDA home loans, as well as Fannie Mae HomePath and Freddie Mac Home Possible mortgages for moderate-income home buyers.
Ideal for borrowers who want a no-hassle process. Quicken Loans gives you a prelimary loan decision in just minutes. If you aren't initially approved, mortgage loan experts can let you know what you need to do to qualify.
Summary: best mortgage lenders for borrowers with low or bad credit scores
- Best for online experience: Rocket Mortgage
- Best for online Experience: J.G. Wentworth
- Best overall for borrowers with low or bad credit scores: Vylla
- Best overall for borrowers with low or bad credit scores: New American Funding
- Best for customer support: Network Capital Funding Mortgage
- Best for customer support: HomeBridge Financial Services
- Best for refinance: Quicken Loans
- Best for refinance: Pacific Union Financial
- Best for low down payment: CitiMortgage
- Best for low down payment: Navy Federal Credit Union