If you’ve got less-than-perfect credit and are looking to purchase a home or refinance your mortgage, there are low credit score mortgage lenders out there with options for you. Bankrate has made it easier to find lenders that provide home loans for bad credit, based on criteria such as lowest minimum credit score requirement, widest array of loan programs for low-credit borrowers and down payment assistance. Here is our guide to the best mortgage lenders for low credit score borrowers in 2022.


To determine the best mortgage lenders for low-credit score borrowers, Bankrate evaluated lenders based on several criteria, including availability of low-credit or low-down payment loan programs; credit score requirements and flexible underwriting.

Best mortgage lenders for low or bad credit borrowers

Rocket Mortgage

Rocket Mortgage review

Loan products Purchase and refinance; conventional, jumbo, FHA, VA, investment property, flex-term
Credit requirements 620 for conventional loans; 680 for jumbo loans; 580 for FHA loans and VA loans
  • Rapid rate quotes
  • Seamless online application that lets you connect bank accounts to verify assets and income
  • Rated highest in customer satisfaction by J.D. Power from 2014 to 2020
  • No branch locations
  • USDA loans not available
  • Fee schedules not available upfront
Highlight Rocket Mortgage is a worthy option for borrowers who prefer a convenient digital lending experience.

Carrington Mortgage Services

Carrington Mortgage Services review

Loan products Purchase and refinance; conventional, FHA, VA, USDA, non-QM
Credit requirements 620 for conventional loans; 500 for FHA loans and VA loans; 500 for non-QM
  • Several loan options for credit-challenged borrowers
  • Personalized support from a dedicated loan officer
  • Low-down payment loan products for first-time homebuyers
  • Loans not offered in Massachusetts and North Dakota
  • Must connect directly with a loan officer to get prequalified and apply for a loan
Highlight Carrington Mortgage Services offers an assortment of mortgages and exceptional in-person or phone support.

Flagstar Bank

Flagstar Bank mortgage review

Loan products Purchase and refinance; conventional, jumbo, FHA, VA, USDA, home equity loan, construction and renovation loans
Credit requirements 620 for conventional loans; 700 for jumbo loans; 580 for FHA loans
  • Rated A+ by the Better Business Bureau (BBB)
  • Available in all 50 states
  • Government-backed programs and flexible mortgage options for credit-challenged borrowers
  • Up to $5,000 towards your down payment or closing costs with the Flagstar Gift Program
  • Up to $2,500 in down payment assistance and $7,500 if you use Detroit Land Bank to buy a home
  • No origination fees
  • Not BBB-accredited
Highlight Flagstar Bank offers down payment and closing cost assistance to help make your dreams of homeownership a reality, even if you’ve had past credit issues.

Bank of America

Bank of America mortgage review

Loan products Purchase and refinance; conventional, jumbo, FHA, VA, home equity line of credit (HELOC)
Credit requirements 620 for conventional loans; 680 for jumbo loans
  • Streamlined online application process
  • Government-backed mortgage options for borrowers with lower credit scores
  • Affordable Loan Solution mortgage with 3 percent down payment and no mortgage insurance
  • Interest rates displayed online and updated daily
  • Over 4,000 branches nationwide for in-person support
  • No USDA loans
Highlight Bank of America offers two grant programs: One is a lender credit of up to $7,500 for closing costs or to buy down the rate, and the other is for up to $10,000 and can be used towards the down payment.

Freedom Mortgage

Freedom Mortgage review

Loan products Purchase and refinance; conventional, jumbo, FHA, VA, USDA, HELOC, construction and renovation loans, investment property
Credit requirements 620 for conventional loans and VA loans; 580 for FHA loans
  • Available in all 50 states
  • Get support from a dedicated, local mortgage loan officer
  • Branches not located in all states
  • Rates not published online
Highlight Freedom Mortgage is one of the top FHA and VA loan lenders, which can have more flexible credit requirements.

Can I get approved for a mortgage with bad credit?

It’s possible to qualify for a mortgage even if you have bad, low or poor credit. In fact, the U.S. Department of Housing and Urban Development (HUD) reports that the share of mortgages made to borrowers with a credit score of less than 620 has steadily grown in recent years.

You can also improve your chances of getting approved for a mortgage if you apply with a co-borrower or co-signer who has good credit. Note that a co-borrower has ownership of the property, but a co-signer doesn’t, so the latter might be the better option if you’re just looking to give your credit profile a boost.

What type of mortgage can I qualify for with bad credit? 

The types of mortgages worth considering if you have poor credit include:

  • FHA loans
  • VA loans
  • USDA loans
  • Non-qualified mortgages (non-QM)

Be wary of mortgage products that tout “guaranteed approval” without a credit check, or other offers with too-good-to-be-true claims. These are most likely bad actors, and going this route can potentially do more harm to your credit.

What is the lowest credit score needed for a mortgage?

The lowest credit score you need to qualify for a mortgage depends on the loan program and the lender. Conventional loans usually have a minimum credit score of 620, but borrowers with higher credit scores tend to nab better rates. FHA, VA and USDA loans have lower minimum credit score requirements than conventional loans, and might make more sense for you if your credit needs improvement.

How a low credit score affects your mortgage

The lowest interest rates go to borrowers with the strongest credit scores. Borrowers with lower scores have higher rates, and potentially pay steeper financing costs, since they present more risk to the lender. If you have a lower score, you could spend several thousand more in interest over the life of your mortgage.

Assume you get a $350,000 30-year mortgage with a fixed 4.5 percent rate. Your monthly payment (for principal and interest only) would be $1,773, and you would pay $288,583 in interest over the 30-year loan term.

If you were able to improve your credit and secure a rate of 3.75 percent instead, your monthly payment would drop to $1,620, and you’d pay $233,800 in interest for the duration of the loan. That’s a cost savings of approximately $54,800. 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 credit-challenged borrowers.
  • Consider using a credit union or online lender, which might have more flexible loan options.
  • Look into government-backed loan programs, as they typically have less stringent qualification criteria.
  • Ask a trusted friend or relative with excellent credit to co-sign your mortgage.
  • Stop charging credit cards and refrain from opening any new credit accounts before you apply for your mortgage, as well as during the application process.

How to refinance a mortgage with bad credit

If you’re worried your credit score is too low to refinance your mortgage, consider these options:

  1. Wait, and work to improve your credit score to potentially qualify for a lower rate.
  2. Inquire about refinancing with your current lender, which might approve you off the strength of the relationship you’ve built with their institution.
  3. Consider an FHA rate-and-term or streamline refinance (or VA or USDA streamline refinance, if eligible).
  4. Explore portfolio lenders who offer refinancing, as they might have more flexibility.
  5. Get a co-signer with a strong credit history and a substantial amount of savings or other assets.

How to improve your credit score

It’s best to work toward a higher credit score before applying for a mortgage, even if you’ve had some serious dings in the past. You could increase your chances of getting approved and possibly qualify for a more competitive interest rate. Here are some tips:

  1. Review your three credit reports from the credit reporting bureaus for no charge at com. Contact the agency as soon as possible if you spot any errors or inaccuracies so you can resolve them quickly.
  2. Pay all of your bills on time and in full, if possible.
  3. While it can be tempting to cut off access completely, close credit cards with caution. Your credit score can drop if you close an account. You’re better off simply not using the card, or using it sparingly and paying it back promptly.
  4. If your credit report is thin, ask a family member or friend to add you as an authorized user to their existing credit card. This can help build your credit history.
  5. Don’t apply for new credit too frequently, especially before applying for a mortgage and during the loan underwriting process.
  6. Enroll in the Experian Boost or UltraFICO program. These free programs take into account your bill payment history and your banking data, respectively, which can help improve your credit score.
  7. If you need more help, consider consulting with a credit counseling organization. Just be wary of debt settlers, who often give bad advice but pose as reputable credit counselors.

Summary: Best mortgage lenders for low or bad credit borrowers

With additional reporting by Allison Martin

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