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But if you keep your finances in order and make on-time payments following a bankruptcy, you could potentially qualify for a mortgage in as little as two years. Having bad credit is different than having no credit. If your low credit score comes from collections, write-offs, and late and missed payments, “bad credit” will get your loan denied.

You’ll probably need to take a year or so and work on improving your credit score before you can get serious about buying a house. The FICO credit scoring model interprets the information found in your credit report. Some parts of your credit history are more important than others and will carry more weight on your overall score.

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If your credit score or credit history is standing in the way of your home buying plans, you’ll need to take steps to improve them. Some issues — like errors on your credit report — can be a relatively quick fix and have an immediate impact on your score. Other issues can take much longer to resolve.

This will give you time to identify issues with your score or report and work on solving them before you apply for mortgage pre-approval. You can, and should, check your credit report before buying a house. Normally, consumers can get one free credit report from each of the major credit bureaus each year at If you find errors on your credit report, take steps to correct them as quickly as possible.

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After you get the results of the investigation, check the credit report again to make sure the errors have been removed. The upside to buying a house with your spouse or partner is that you’re likely combining two incomes, which can help you qualify for a larger mortgage payment and a more expensive home.

However, doing this gives your partner some ownership interest in the property, while you would be the only one obligated to pay the mortgage. Note that if you have joint bank and investment accounts, you can use this money for your down payment and count it as an asset on your mortgage application.

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This process reduces your debt, but it can also lower your credit score along the way. Before you commit to a DMP, ask your creditors how the account will be reported to credit bureaus so you can make an informed decision. If your credit score and payment history are in their wheelhouse, and your debt-to-income ratio is acceptable, most mortgage lenders don’t care if you’re in a debt management plan.

With a score above 620, you should have no problem getting credit-approved to buy a house. But remember: Credit is only one piece of the puzzle. A lender also needs to approve your income, employment, savings, and debts, as well as the location and price of the home you plan to buy.

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This can typically be done online for free, and it will give you a verified answer about your home buying prospects.

Many will accept a credit score as low as 620, but they may have other requirements for those borrowers, such as a higher income or a larger down payment. FHA loans: The Federal Housing Administration guarantees loans geared toward borrowers with lower credit scores and low down payments, especially first-time homebuyers.

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5 percent interest rate and a 6 percent rate on a $200,000 mortgage is $64 per month. That comes out to more than $23,000 over the course of a 30-year mortgage term. “A low credit score can make it less likely that you would qualify for the most affordable rates, and could even lead to rejection of your mortgage application,” says Bruce Mc, Clary, senior VP of communications for the National Foundation for Credit Counseling.

Lenders like to see credit utilization of 30 percent or less. Your payment history accounts for 35 percent of your credit score. While late payments stay on your credit report for seven years, their impact on your score diminishes over time. Closing unused accounts sounds like a good idea, but it may raise your credit utilization ratio and cause your credit score to drop.

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Many conventional loans allow you to borrow with a ”fair” credit score of 620 or higher, though your interest rate may be higher than it would be with a higher credit score. FHA and VA loans may allow even lower scores. Caret Down There are plenty of proactive steps you can take to improve your credit score.