Credit scores play a major role in the mortgage approval process.
They help lenders decide how much risk is tied to lending money and directly influence loan options, interest rates, and terms.
A score of 600 falls on the lower side of the scale, raising the question: Can homeownership still be possible?
Today, we want to explore mortgage opportunities that are available for borrowers with a 600 score and what challenges or expectations may come along the way.
Can You Buy a House With a 600 Credit Score?
Buying a home with a 600 score is challenging, but it is not impossible.
Lenders consider the score as one factor among many, meaning other financial details carry a lot of weight.
A strong overall profile can help offset credit weaknesses, but applicants must be prepared for higher costs and stricter approval requirements.
Several key factors come into play:
- Debt-to-Income Ratio (DTI): Lower ratios indicate that income comfortably covers debts. Lenders often prefer to see this at 43% or below.
- Employment Stability: At least two years of steady work in the same field reassures lenders that income is reliable.
- Recent Credit History: Even with a low score, a borrower with no major delinquencies in the past year may have a stronger chance.
- Down Payment and Assets: Larger down payments reduce lender risk, making approval more likely. Savings and assets also play a role.
Approval is still possible, but expect stricter conditions.
Higher interest rates are likely, which can add thousands of dollars over the life of a loan.
Preparing thorough financial documentation and being realistic about the total costs are essential steps before approaching lenders.
Mortgage Options for a 600 Credit Score
Different mortgage products are available for borrowers with a 600 score, but each comes with its own requirements and trade-offs.
Some government-backed loans are more forgiving than conventional programs.
FHA Loans (U.S.)
FHA loans are popular among borrowers with weaker credit profiles.
They allow flexibility while requiring safeguards like mortgage insurance.
- 580+ score: Minimum 3.5% down payment
- 500–579 score: Minimum 10% down payment
- Lenient DTI ratios: Easier approval for borrowers with higher obligations
- Mandatory mortgage insurance: Adds cost but reduces lender risk
VA Loans
For those who qualify through military service, VA loans are one of the best paths to homeownership.
They remove some of the biggest hurdles faced by buyers with a lower score.
- No official minimum (lenders often require 580–660)
- No down payment requirement
- No private mortgage insurance (PMI)
- Available only to eligible veterans, service members, and spouses
USDA Loans
Designed for rural and select suburban areas, USDA loans can work for borrowers in this range who meet income guidelines.
- No down payment required
- Lender minimums are usually around 600–620
- Income restrictions based on household size and area
- Targeted at rural or semi-rural properties
Non-Qualified Mortgages (Non-QM)
Non-QM loans serve individuals who do not fit into standard underwriting boxes. They often help self-employed borrowers or those with unusual income patterns.
- Accept credit scores as low as 550
- Higher interest rates compared to traditional loans
- Flexible documentation requirements (bank statements, assets, alternative income verification)
- Useful for borrowers with prior financial setbacks
Conventional Loans
Conventional loans are the most restrictive for those with lower credit.
While technically possible, a 600 score is below the general cutoff.
- Usually requires a a 620+ credit score
- 600 may only qualify with a larger down payment or special lender flexibility
- Often come with higher LLPAs (loan-level price adjustments)
- Less forgiving of financial blemishes compared to FHA or VA loans
Improving Your Credit Before Applying
Boosting a credit score by even 20 to 40 points can open the door to better mortgage products.
Small, consistent actions build momentum.
Steps to take include:
- Pay bills on time to establish reliability.
- Keep credit utilization below 30% of available credit.
- Review and dispute errors on credit reports.
- Avoid new credit accounts before applying.
- Ask to become an authorized user on someone else’s well-managed credit card.
- Consider rapid rescoring if improvements have been made recently.
Pairing these actions with credit monitoring ensures progress is tracked and helps applicants stay mortgage-ready.
How a 600 Credit Score Affects Mortgage Rates
A credit score at the 600 level puts borrowers in a higher-risk category. Lenders offset this by raising interest rates, sometimes significantly.
Over a $400,000 loan, a borrower could pay $70,000 or more in extra interest compared to someone with excellent credit.
Loan-level price adjustments (LLPAs) also apply, adding to costs.
These adjustments are specifically tied to credit scores and down payments, creating financial penalties for lower ranges.
Improving credit before applying can lead to thousands of dollars in savings across the life of a mortgage.
Additional Factors Beyond Credit Score
Lenders review much more than the credit score itself.
Affordability plays a key role, with income, current expenses, and potential changes in rates factored into the decision.
Loan-to-Value Ratio (LTV) is another crucial measurement, and a larger down payment lowers this ratio while signaling financial strength.
Certain lenders also consider alternative data points.
Rent history, consistent utility bill payments, or bank statements may support an application when credit scores fall short.
These details can tip the balance in favor of approval, especially when paired with a steady income.
Alternative Paths to Homeownership
Borrowers who cannot secure a standard loan at 600 still have other options.
These alternatives provide creative routes to ownership.
- Rent-to-own arrangements: Build equity while renting.
- Co-signer with stronger credit: Helps gain approval by reducing perceived risk.
- Down payment assistance programs: State and local aid for buyers struggling with upfront costs.
- Credit unions and specialized lenders: Often more flexible than big banks.
Persistence and resourcefulness can create opportunities even when traditional financing feels out of reach.
Summary
A 600 credit score does not eliminate the chance of buying a home, but it limits choices and often brings higher costs.
FHA, VA, and USDA loans are generally the strongest routes for borrowers in this range.
Improving credit, even by a modest margin, can change mortgage terms significantly.
Comparing multiple lenders and preparing finances carefully makes homeownership possible even when starting at a 600 score.
