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The best mortgage lenders for low credit scores of February 2022

The minimum credit scores listed above assume a 3.5% down payment, which is standard for an FHA mortgage.

Best mortgage lenders for low credit scores of February 2022

Most conforming mortgages, which are what you may think of as “regular mortgages,” require a 620 or 640 credit score. But you may still qualify for a mortgage if you have a low credit score.

FHA mortgages — home loans guaranteed by the Federal Housing Administration — are aimed at homebuyers who have lower credit scores. You could be eligible with a score as low as 580 if you have a 3.5% down payment, or 500 with a 10% down payment.

Alternative credit data can also help you get a mortgage with a poor score. Lenders that accept alternative data may look at proof that you pay bills on time in addition to or in lieu of your credit score.

Here are the best

mortgage lenders

for borrowers with low credit scores.


Minimum credit score and down payment listed are for FHA mortgages only.

The pros of Carrington:

  • A+ rating from the BBB
  • Accepts alternative forms of credit

The cons of Carrington:

  • Can’t see personalized rates online
  • Unavailable to residents of Massachusetts and North Dakota


Minimum credit score and down payment listed are for FHA mortgages only.

The pros of Fairway Independent:

  • A+ rating from the BBB
  • Accepts alternative forms of credit
  • Easy-to-navigate website
  • Option to close on your mortgage digitally instead of in person
  • Available in all 50 US states

The cons of Fairway Independent:

  • Rates aren’t posted online

Guild Mortgage

Minimum credit score and down payment listed are for FHA mortgages only.

The pros of Guild Mortgage:

  • Accepts alternative forms of credit
  • Option to close online instead of in person

The cons of Guild Mortgage:

  • A- rating because the BBB
  • Unavailable to residents of New Jersey or New York

New American Funding

Minimum credit score and down payment listed are for FHA mortgages only.

The pros of New American Funding:

  • A+ rating from the BBB
  • Accepts alternative forms of credit

The cons of New American Funding:

  • Not available to residents of Hawaii or New York

Rocket Mortgage

Minimum credit score and down payment listed are for FHA mortgages only.

The pros of Rocket Mortgage

  • Has ranked as the top lender for customer satisfaction from J.D. Power for 11 consecutive years, amd ranked No. 2 in 2021
  • A+ rating from the BBB
  • Quick, easy online experience
  • Live online chat with customer service
  • Available in all 50 US states

The cons of Rocket Mortgage:

  • No physical locations
  • Doesn’t accept alternative credit data — you must show your credit score to get a mortgage


Personal Finance Insider looked at two main factors when choosing the best mortgage lenders for low credit scores:

  • Does the lender offer FHA mortgages?
  • Does the lender accept alternative credit data?

These are the two major components that help people with low credit scores qualify for mortgages. We also looked at the following:

  • Credit score. FHA loans’ main appeal is that you don’t need a great credit score to qualify. However, some lenders have increased their FHA credit score requirement to be the same as their conventional mortgage requirement, usually around 620 or 640. We chose FHA lenders that kept their requirement around 580 or 600.
  • Customer satisfaction. If the lender appeared in the J.D. Power 2021 Primary Mortgage Origination Satisfaction Survey, we looked at its ranking. If it wasn’t in the survey, then we read online customer reviews.
  • Ethics. Each of our top picks received an A+ from the Better Business Bureau, which measures companies’ trustworthiness. The exception is Guild Mortgage, who has a B+ from the BBB. We also researched and considered any scandals in the past three years.

Rocket Mortgage is the only lender on our list that does not accept alternative credit data. But we still included it because it thrives in other areas, like customer satisfaction.

Are these mortgage lenders trustworthy?

We have included each lender’s grade from the Better Business Bureau. The BBB evaluates businesses by looking at companies’ responses to customer complaints, transparency about business practices, and honesty in advertising.

Most of our top picks have an A+ from the BBB. The exception is Guild Mortgage, which has a A- rating. The BBB says that Guild Mortgage received a A- rating due to government action against the lender. In 2020, Guild Mortgage paid the United States $24.9 million when it was accused of approving FHA mortgages for people who didn’t qualify, resulting in loan defaults.

In 2019, the US Justice Department required Rocket Mortgage’s parent company Quicken Loans to pay $32.5 million for alleged mortgage fraud. The Justice Department claimed Quicken Loans approved mortgage applications it shouldn’t have. Although Quicken Loans paid the settlement, the company never admitted to mortgage fraud.

Frequently asked questions

Can I get a home loan with a 500 credit score?

Yes, you may be able to get an FHA mortgage with a credit score as low as 500 — but you’ll need a 10% down payment. This is in contrast with getting an FHA mortgage with a 580 credit score and 3.5% down payment.

What is the easiest mortgage to qualify for?

An FHA mortgage is usually the easiest home loan to get. You can qualify with a credit score as low as 580 (with a 3.5% down payment) or even 500 (with a 10% down payment). You can also usually qualify for an FHA mortgage with more debt than with a conforming mortgage.

These are general rules of thumb, but exact requirements will vary by mortgage lender.

How does alternative credit data work?

Most lenders pull your credit score when you apply for mortgage preapproval. If you have a poor credit score, the lender may saddle you with a high interest rate or even deny you for a mortgage all together.

But most of the lenders on our list accept alternative credit data. You can show proof of paying bills like rent, utilities, and insurance on time, and this provides evidence that you are financially reliable even though your credit isn’t in the best shape. Alternative credit data is especially useful if you don’t have a credit score at all.

Each lender has different requirements for alternative data. For example, a company may require proof of on-time rent payments dating back 12 months.

Should I get a mortgage with a low credit score?

It depends on your situation. A poor credit score is sometimes a sign of larger financial issues — maybe your score is low because you don’t pay your bills on time or because you have a lot of debt. In these cases, adding another payment and form of debt by taking out a mortgage may not be a great idea.

But if you feel confident that you can afford monthly payments and are working to improve your credit score, it may be a good time to buy a home.

Experts’ advice on choosing a mortgage lender

We consulted mortgage and financial experts to inform these picks and provide their insights about mortgage lenders. Our experts have also provided advice about how to know whether you’re ready to get a mortgage, and how to decide which type of mortgage is best for you.

PFI Mortgage expert panel


Here’s what they had to say about mortgages. (Some text may be lightly edited for clarity.)

What factors should someone take into consideration when choosing a mortgage lender?

Anthony Park, author:

“The canned answer is to just go with the lowest rate. However, you also want to take into account who’s going to serve your loan best. Are repayments going to be easy for you? Who is most likely to be able to help you if you need to take out a HELOC or refinance later, versus somebody who’s more of a one-off type?

“They may have the lowest rates to get you involved, but they might have very, very little hand holding after the fact. I wouldn’t recommend paying an exorbitant amount more for potential services in the future, but just don’t always necessarily go with the rock-bottom lowest rate. There’s sometimes a cost with that.”

Laura Grace Tarpley, Personal Finance Insider:

Apply for preapproval with multiple lenders. Each lender’s preapproval letter states how much it would lend to you, and it locks in your interest rate. It’s an effective way to compare lenders and see which will give you the best deal.

“But try to apply with all the lenders within a month or so. When you apply for preapproval, a lender does a hard credit inquiry. A bunch of hard inquiries on your report can hurt your credit score, unless it’s for the sake of shopping for the best rate. If you limit your rate shopping to a month or so, credit bureaus will understand that you’re looking for a home and shouldn’t hold each individual inquiry against you.”

How can someone decide between a conventional mortgage vs. a government-backed mortgage?

Anthony Park, author:

‘It really depends on if you qualify. If you do qualify for FHA or VA mortgages, those are no-brainers. just because the terms are so favorable. If you don’t qualify, you fall back by default onto conventional mortgages.”

Julie Aragon, Aragon Lending Team:

“The most common government loan that’s widely available to almost everyone is the FHA loan. There’s a couple of reasons why somebody would go with FHA instead of conventional one. Their credit is a little on the crummy side, let’s say below 700. You can get conventional with down to a 620 score, but the mortgage insurance gets really expensive. FHA doesn’t discriminate — no matter how perfect or crappy your credit is, the mortgage insurance is the same.”

How can someone know whether they’re financially ready to buy a home?

Lauryn Williams, CFP:

“You should have funds left over after everything is said and done as it pertains to purchasing the home. So if you don’t have an emergency fund plus a down payment, you’re probably not ready to purchase a home. Another thing I think about is credit card debt. While you can be approved for a mortgage with credit card debt and student loans and very little cash on hand, you put yourself in a very risky situation.”

Laura Grace Tarpley, Personal Finance Insider:

“You should be able to afford the extra costs that come with owning a home, like home repairs or lawn care. You didn’t have to budget for those things when you rented, because the landlord was responsible for maintenance.”

Mortgage and refinance rates by state

Check the latest rates in your state at the links below. 

New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Rhode Island
South Carolina
South Dakota
Washington DC
West Virginia

Laura Grace Tarpley, CEPF

Editor, Banking & Mortgages

Laura Grace Tarpley is an editor at Insider, responsible for banking and mortgage coverage on Personal Finance Insider. She covers mortgage rates, refinance rates, lenders, bank accounts, and borrowing and savings tips. She is also a Certified Educator in Personal Finance (CEPF). Before joining the Insider team, she was a freelance finance writer for companies like SoFi and The Penny Hoarder, as well as an editor at FluentU. You can reach Laura Grace at
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