What Credit Score is Needed to Buy a House in 2025? (Raleigh, NC Mortgage Guide)
Buying a home is one of the biggest financial decisions you’ll ever make—and your credit score plays a major role in determining whether you qualify for a mortgage, how much you’ll pay in interest, and what loan programs are available to you. If you’re wondering what credit score you need to buy a house in North Carolina in 2025, here’s everything you should know.
What is a Credit Score?
A credit score is a three-digit number (usually ranging from 300–850) that reflects how likely you are to repay borrowed money. Mortgage lenders rely heavily on your FICO score, which is calculated based on:
- Payment history (35%)
- Amounts owed / credit utilization (30%)
- Length of credit history (15%)
- Credit mix (10%)
- New credit inquiries (10%)
The higher your score, the more likely you are to qualify for favorable loan terms and lower interest rates.
Minimum Credit Score by Loan Type
Every mortgage program has different requirements. Here’s a quick reference table for 2025:
| Loan Type | Typical Minimum Credit Score | Down Payment / Notes |
| Conventional | 620+ | 3-20% down; higher scores = better rates |
| FHA | 580+ (with 3.5% down) | 500-579 may qualify with 10% down |
| VA (Veterans) | No official minimum, but most lenders look for 580-620 | 0% down, no monthly PMI |
| USDA | 640+ recommended | 0% down, income limits apply per county and state |
| Jumbo Loans | 680-700+ | 10-20% down; stricter requirements |
👉 Tip: Even if you meet the minimums, having a higher score (typically 740+) can save you thousands over the life of your loan.
What is Considered a Good Credit Score?
Here’s how FICO generally categorizes credit scores:
- Excellent: 800+
- Very Good: 740–799
- Good: 670–739
- Fair: 580–669
- Poor: Below 580
For homebuyers in Raleigh and across NC, a score of at least 660 usually positions you for competitive mortgage rates, but aiming for 720+ often unlocks the best financing options.
Credit Score Requirements in North Carolina
While national guidelines apply, North Carolina homebuyers also benefit from state-specific programs:
- NC Home Advantage Mortgage™ – Requires a minimum 640 score, offers down payment assistance for qualifying buyers. (NC Housing Finance Agency)
- First-time buyer programs in Raleigh/Durham – Local lenders may accept slightly lower scores if paired with strong income and debt-to-income ratios.
New Home Inc works with trusted lending partners who can guide you through local mortgage requirements and special programs available to NC residents.
How to Improve Your Credit Score Before Buying a House
If your score isn’t where you want it to be, here are steps to raise it:
- Pay bills on time – Even one late payment can drop your score significantly.
- Lower credit utilization – Aim to use less than 30% of available credit.
- Avoid new credit lines – Too many hard inquiries can hurt your score.
- Keep old accounts open – A longer credit history boosts your score.
- Check your credit report for errors – Dispute inaccuracies with the credit bureaus.
With consistent effort, many buyers improve their scores within 6–12 months.
Other Factors Lenders Consider Beyond Credit Score
Your credit score isn’t the only thing lenders review. They’ll also look at:
- Debt-to-income ratio (DTI): Ideally under 43%
- Employment history: Steady income for 2+ years is preferred
- Down payment: Larger down payments may offset a lower score
- Assets & reserves: Savings, retirement funds, or investments add security
FAQs About Credit Scores and Homebuying
Can I get a mortgage with a 500 credit score?
Possibly—with FHA financing and a 10% down payment, but options are limited.
Does a higher credit score always mean a lower interest rate?
Not always—market rates, loan type, and lender policies also play a role. But higher scores almost always qualify for better pricing tiers.
How long does it take to improve a credit score by 50 points?
Many borrowers see improvements within 3–6 months if they reduce balances and avoid late payments.
Do VA and USDA loans really require no down payment?
Yes, but you’ll still need to meet income, property, and credit guidelines.
Final Thoughts: Preparing to Buy a Home in Raleigh, NC
Your credit score is one of the most important factors in buying a home, but it’s not the only one. With the right preparation, even buyers with less-than-perfect credit can achieve homeownership.
At New Home Inc, we help buyers across the Raleigh area find their dream home—and connect them with trusted lenders who can guide them through credit requirements and financing options. Whether you’re ready to buy now or just starting to plan, our team is here to support your journey.
👉 Explore our new home communities in Raleigh, NC and take the first step toward homeownership today.
