If your credit needs work, that doesn’t necessarily mean you won’t qualify for a mortgage. Here’s our guide to the best mortgage lenders for bad-credit borrowers in 2024.

Best mortgage lenders for bad credit

Lender Credit requirements Down payment minimum Bankrate Score
Old National Bank 620 for conventional loans, 640 for FHA loans, 680 for VA loans Undisclosed 4.6
Veterans United Home Loans 620 for conventional and VA loans 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans 4.9
New American Funding 620 for conventional loans 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans 4.8
First Mortgage Direct 620 for conventional loans, 580 for FHA and VA loans 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans 4.8
U.S. Bank 620 for conventional loans, 740 for jumbo loans 5% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans 4.8
Wells Fargo 620 for conventional loans 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans 4.8

Old National Bank

Old National Bank

Learn more in our Bankrate review
    • Availability: All U.S. states
    • Loans offered: Conventional, jumbo, FHA, VA, USDA
    • Credit requirements: 620 for conventional loans, 640 for FHA loans, 680 for VA loans
    • Down payment minimum: Undisclosed
    • Where to find: Branch locations and online

Veterans United Home Loans

Veterans United Home Loans

Learn more in our Bankrate review
    • Availability: All U.S. states
    • Loans offered: Conventional, jumbo, FHA, VA, USDA
    • Credit requirements: 620 for conventional and VA loans
    • Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
    • Where to find: Branch locations and online

New American Funding

New American Funding

Learn more in our Bankrate review
    • Availability: All U.S. states except Hawaii and New York
    • Loans offered: Conventional, jumbo, FHA, VA, USDA
    • Credit requirements: 620 for conventional loans
    • Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
    • Where to find: Branch locations and online

First Mortgage Direct

First Mortgage Direct

Learn more in our Bankrate review
    • Availability: All U.S. states
    • Loans offered: Conventional, jumbo, FHA, VA, USDA
    • Credit requirements: 620 for conventional loans, 580 for FHA loans and VA loans
    • Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
    • Where to find: Online

US Bank Logo

U.S. Bank

Learn more in our Bankrate review
    • Availability: All U.S. states
    • Loans offered: Conventional, jumbo, FHA, VA, USDA
    • Credit requirements: 620 for conventional loans, 740 for jumbo loans
    • Down payment minimum: 5% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
    • Where to find: Branch locations and online

Wells Fargo logo

Wells Fargo

Learn more in our Bankrate review
    • Availability: All U.S. states
    • Loans offered: Conventional, jumbo, FHA, VA, USDA
    • Credit requirements: 620 for conventional loans
    • Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
    • Where to find: Branch locations and online

How a low credit score affects your mortgage

The best interest rates go to borrowers with the strongest credit scores. If you have a lower score, you’ll be quoted higher rates. If you have a lower score, you could spend several thousand more in interest over the life of your mortgage.

Say you’re obtaining a $350,000, 30-year mortgage with a fixed 7.6 percent rate. Your monthly payment would be $2,447 (excluding homeowners insurance premiums and property taxes), and you’d pay $531,258 in interest over the 30-year loan term.

If you were to improve your credit and get a lower rate of 6.9 percent instead, your monthly payment would drop to $2,305, and you’d pay $479,920 in interest for the duration of the loan. That’s a cost savings of approximately $50,000.

You can use Bankrate’s mortgage calculator to compare different scenarios with higher and lower rates.

How to get a mortgage with bad credit

A bad credit score doesn’t automatically mean you won’t get approved for a mortgage, but you can expect to pay more for the loan. You could also have fewer options to choose from. Follow these tips to boost your approval odds:

  • Shop with lenders who specialize in mortgages for borrowers with fair or poor credit.
  • Consider using a credit union or online lender, which might have more flexible loan options.
  • Look into government-backed loan programs, which might have less stringent qualification criteria.
  • Ask a trusted friend or relative with excellent credit to co-sign your mortgage.
  • Stop charging with credit cards and refrain from opening any new credit accounts before you apply for your mortgage, as well as during the application process.

FAQs