Think your credit is too low to get a mortgage? You might be closer to qualifying than you think. There are plenty of lenders out there that accept low or bad credit scores, and many even have flexible requirements for borrowers who have recent negative credit events like bankruptcies or foreclosures.
Business Insider reviewed dozens of companies to find the best mortgage lenders for bad credit scores in 2025. We looked for lenders that rank high in customer satisfaction and trustworthiness, and have low or flexible credit score requirements.
These are the best low credit score mortgage lenders as chosen by Business Insider editors in 2025.
Best Mortgage Lenders for Low or Bad Credit Scores
- Carrington Mortgage Services: Best overall
- Guild Mortgage: Best for those with no credit history
- Rocket Mortgage: Best for an easy online experience
- CrossCountry Mortgage Mortgages: Best for no minimum credit score
Compare Rates
Best Overall
500
3%
Conforming, FHA, USDA, VA, Carrington Flexible Advantage
Pros
Cons
Carrington Mortgage Services is our top low credit score mortgage lender, thanks to its low minimum credit score requirements and willingness to work with those who have recent negative events on their credit reports.
Carrington Mortgage Services FHA mortgage- Offers mortgages in all US states except Massachusetts and North Dakota
- Minimum credit score and down payment displayed are for FHA mortgages. If your score is below 580, you'll need to put down at least 10%.
Carrington Mortgage Services is our top choice for borrowers with low scores. It allows lower scores than a lot of other mortgage lenders and ranks very high in customer satisfaction.
Allows credit scores down to 500
With Carrington, you could get an FHA or VA loan with a credit score as low as 500.
Get a mortgage even if you have a recent foreclosure or bankruptcy
Carrington's standout feature is its Carrington Flexible Advantage mortgage, which accepts borrowers who have recent negative credit events, such as a foreclosure or bankruptcy, on their credit reports. The minimum credit score for this mortgage is 550.
What to look out for: Carrington doesn't lend in Massachusetts or North Dakota. Its average mortgage rates and fees are slightly high, according to Home Mortgage Disclosure Act data.
Carrington has a B+ rating from the BBB because the lender failed to respond to three complaints. Additionally, in November 2022, the Consumer Financial Protection Bureau ordered Carrington to pay $5.25 million in fines for supposedly violating borrowers' CARES Act rights. The CFPB claims that the lender misled borrowers seeking CARES Act forbearance and denied them key protections provided by the pandemic-era law.
Best for Those With No Credit History
540
3%
Conforming, jumbo, FHA, USDA, VA, reverse, renovation, manufactured, bridge, energy-efficient, doctor, Complete Rate
Pros
Cons
Guild Mortgage is our favorite lender for first-time homebuyers, thanks to its flexible credit requirements and easy online process. It offers a huge range of mortgages, making it a good option for many types of borrowers.
Guild Mortgage FHA mortgage- Offers mortgages in every US state except New York and New Jersey
- Branches in 32 US states
- Minimum credit score and down payment displayed are for FHA mortgages. If your score is below 580, you'll need to put down at least 10%.
FHA and USDA borrowers can qualify with scores as low as 540
Guild Mortgage is a great choice both for borrowers with low credit scores and those with no credit score. Guild allows credit scores as low as 540 on its FHA and USDA mortgages.
Qualify with non-traditional if you don't have a score
It also accepts non-traditional credit from borrowers who have no credit history through Guild's Complete Rate program, which is available on its FHA, VA, and USDA mortgages.
What to look out for: Guild doesn't display rates online, so you'll need to apply for preapproval or talk to a loan officer to get an idea of what rate you might get. It also ranked low in J.D. Power's 2024 Mortgage Origination Satisfaction Study.
Best for an Easy Online Experience
580
3%
Conforming, jumbo, FHA, VA
Pros
Cons
Rocket Mortgage, formerly known as Quicken Loans, is a strong lender in general and our "best overall" pick for the best mortgage refinance lenders. It's a great option if you're comfortable applying online and have a good credit score.
Rocket Mortgage FHA mortgage- Offers homes loans in all 50 US states and Washington, DC, but there are no physical branches
- Minimum credit score and down payment displayed are for FHA mortgages.
Allows scores down to 580 on FHA and VA loans
Rocket Mortgage is a good option if you want a smooth online experience and prioritize customer support. This lender requires a minimum credit score of 580 for its FHA and VA mortgages.
What to look out for: Its loan options are relatively limited, and it doesn't have any in-person branches.
Best for No Minimum Credit Score
N/A
3%
Conforming, FHA, VA, USDA, jumbo, renovation, buydown, manufactured, non-QM, home equity loan, HELOC, reverse
Pros
Cons
CrossCountry Mortgage is a very strong mortgage lender overall, particularly for borrowers looking for affordable mortgage options or those who might not qualify elsewhere. It accepts non-traditional credit (such as rent or utility payment history) from borrowers who have no credit score on some of its loans, and it doesn't set minimum credit scores on its products.
CrossCountry Mortgage Mortgages- Lends in all 50 states
- Minimum down payment displayed is for conforming mortgages. CrossCountry Mortgage does not set a minimum credit score
Flexible credit requirements
CrossCountry Mortgage is a good option for borrowers looking for a flexible mortgage lender. In addition to having no minimum credit score requirement on its mortgages, it also accepts non-traditional credit (such as rent payment history) from borrowers who have no score.
What to look out for: CrossCountry doesn't allow you to explore rates online. In J.D. Power's 2024 origination satisfaction study, CrossCountry mortgage ranked below average. But it has many positive online customer reviews.
Find a Mortgage
Potential Challenges
There are mortgage options for borrowers who have lower scores, but they're often expensive. Additionally, if you have a recent foreclosure or bankruptcy, you'll have to wait a certain number of years before you're eligible for some of the most popular types of mortgages. Here are some things you should expect if you're trying to get a mortgage with a poor credit score.
High Interest Rates
The lower your score, the higher your mortgage rate will likely be.
Getting rate quotes and asking about lender fees is important for all mortgage borrowers, but it's especially vital if you have less-than-ideal credit. Though you may pay a higher rate due to your low score, you want to make sure you're not being charged an unfairly high rate or paying a bunch of unnecessary fees.
A Larger Down Payment May Be Required
Lenders take into account the size of your down payment when considering how risky you are as a borrower. The larger your down payment, the less risk there is to the lender. So you may need to bring more of your own cash to the transaction to compensate for your lower score.
Lender Choices Will Be Limited
Finding the right mortgage lender when you have a low credit score can be tricky. Lenders typically want to work with borrowers who are unlikely to default, and having a poor score makes you riskier. While there are lenders that work with borrowers who have low scores, you want to make sure their offerings are affordable.
Loan Options for Bad Credit
FHA Loans
FHA loan lenders often accept scores as low as 580 with a 3.5% down payment, or 500 if you have a 10% down payment.
These loans also have shorter waiting periods after a foreclosure. You could get an FHA loan as soon as three years after your foreclosure, as opposed to the typical seven-year waiting period for conforming loans.
VA Loans
Some VA mortgage lenders may also allow scores of 580 or lower, but this is less common. Our top pick, Carrington Mortgage Services, will accept scores down to 500 on its VA loans. These loans also only have a two-year waiting period following a foreclosure.
USDA Loans
USDA loans often require decent credit scores — you'll need a score of at least 640 to qualify with many USDA loan lenders. However, like other government-backed mortgages, USDA loans also have a relatively short, three-year waiting period following a foreclosure.
Conventional and Non-QM Loans
You won't be able to get a conforming loan with a score below 620. Conforming loans are a type of conventional mortgage that are backed by the government-sponsored enterprises Fannie Mae and Freddie Mac.
But other types of conventional loans may be an option. Non-QM loans are an option for borrowers who don't meet traditional mortgage requirements. They may allow even shorter waiting periods following foreclosures or bankruptcies and low credit scores. However, non-QM loans can be expensive.
Alternative Financing
If you don't qualify for any other options, you may want to explore some alternative means of purchasing a home.
With an owner financing agreement, for example, the owner of the home you're purchasing provides you with the mortgage, rather than requiring you to qualify for a mortgage with a traditional lender. Or you could consider a rent-to-own option.
Keep in mind, though, that these types of alternative financing can be risky. It may ultimately be better to take the time to work on improving your credit before you try to purchase a home.
Boost Your Chances Before You Apply
Improve Your Credit
There are small things you can do to improve your credit score and raise your chances of qualifying for a mortgage. Making on-time payments on your current debts will help re-establish that you're a reliable borrower. You can also pay down revolving debt (like a credit card) or request a credit line increase to lower your utilization, boosting your score.
Time will also help heal your credit (assuming you're making on-time payments). It can take anywhere from a few months to a few years to raise your score.
Save a Larger Down Payment
As we mentioned above, a larger down payment can offset some of the risk of having a lower score, so lenders may be more willing to work with you if you can put at least 10% or 20% down.
Seek Credit Counseling
If you feel stuck, a nonprofit credit counseling agency can help you determine how to get your credit back on track. The Department of Justice keeps a list of approved credit counseling agencies.
Red Flags to Watch Out For
Don't be a victim of predatory lenders or end up with an unaffordable mortgage. Here's what to watch out for as you search for a low credit score lender.
High Costs
Mortgages are going to be more expensive for borrowers with lower credit scores. You should expect to get a higher interest rate, but it shouldn't be unusually high. You also shouldn't have to pay a ton in lender fees. Getting quotes from multiple lenders can help give you an idea of what's realistic for your financial profile.
Additionally, make sure that any lenders you're considering are upfront about the costs you'll incur. Your closing costs shouldn't change dramatically between your initial approval and closing day.
Too-Good-To-Be-True Offers
If you're offered an unbelievably low rate or a mortgage with no costs, tread carefully. If it sounds too good to be true, it probably is. Again, getting quotes from multiple lenders can help you see if a company is offering you a deceptively good deal.
Risky Features
Some mortgages may come with risky features like balloon payments, interest-only payments, or negative amortization.
With mortgages that have balloon payments, you'll typically make your monthly payments for a period of time and then have to pay the rest of the loan in one lump sum. These may be combined with interest-only payments, where you only pay enough each month to cover the interest on the loan.
You should also watch out for negative amortization, which means that you don't pay enough to cover the full interest charged, so the amount you owe increases over time.
High-Pressure Sales Tactics
Lenders should give you time to consider the terms they've offering and not try to rush you into agreeing to a mortgage. If you feel like you're being pressured into a loan, that's a big red flag.
Why You Should Trust Us: Experts' Advice on Choosing the Best Mortgage Lender for Low or Bad Credit Scores
To help you learn more about homebuying, mortgages, and lenders, four experts weighed in:
- Anthony Park, author of "How to Buy Your Perfect First Home"
- Lauryn Williams, certified financial planner, founder of Worth Winning Financial Planning
- Julie Aragon, mortgage broker, founder of Aragon Lending Team
- Molly Grace, mortgage reporter at Business Insider
Here's their advice about how to evaluate mortgage lenders, and how to decide which type of mortgage is best for you. (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."
Molly Grace, Business Insider:
"Remember that you're not just choosing a mortgage lender — you're also building a homebuying team. To snag the home you want in this competitive market, you need a lender that can move quickly and has good communication with you and your real estate agent.
When I was looking for a house, I was able to text my loan officer (whom my real estate agent recommended) and get quick replies when I had questions or needed an updated preapproval letter for an offer. As you compare lenders, pay attention to how responsive they are, and ask your agent if they have any experience with the lenders you're considering."
How can someone decide between a conventional mortgage vs. a government-backed mortgage?
Molly Grace, Business Insider
"An FHA mortgage is a really helpful option for borrowers with low scores or kind of rocky credit histories. But if you have great credit, you may get a better rate and pay less for mortgage insurance on a conventional mortgage.
VA mortgages are really great deals. If you qualify for one, you should definitely go for it. You get zero down with no mortgage insurance — plus some of the best rates available."
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."
Molly Grace, Business Insider
"You have to be ready to dedicate a chunk of your budget to homeownership — and I don't mean your mortgage payment. When you own your house, there's always something that needs taking care of, especially in the first year. We got to our new house on moving day to find that the A/C was out. We paid $700 to have it fixed."
Methodology: How Did We Choose the Best Low Credit Score Lenders?
In choosing the best mortgage lenders for low credit scores, Business Insider looked for lenders that:
- Offer mortgages that allow scores below 620, including FHA mortgages.
- Have flexible credit requirements on one or more of their mortgage products — this could include accepting non-traditional forms of credit (such as proof of rent payments in lieu of a formal credit history) or considering borrowers who have negative events (such as a bankruptcy or foreclosure) on their credit reports.
FHA mortgages can be a great option for those with lower scores, but some lenders that offer these mortgages require higher scores than the minimum of 580 (or 500 with a 10% down payment). All of the lenders on our list allow scores of 600 or lower on their FHA mortgages.
Many of the lenders we included also have their own specialty mortgage products that allow scores below 620, such as Carrington's Flexible Advantage mortgage.
We also looked at the following:
- Customer satisfaction. If the lender appeared in the J.D. Power 2024 Mortgage Origination Satisfaction Study, we looked at its ranking. We also read online customer reviews to understand what borrowers think about the lender, including what they like and don't like.
- Ethics. Most of our top picks received an A+ from the Better Business Bureau, which measures companies' trustworthiness. We also researched and considered any scandals in the past three years.
See our full methodology for evaluating mortgage lenders »
Low Credit Score Mortgage Lenders FAQs
What's considered a "bad" credit score for mortgages?
A bad or too-low credit score for a mortgage generally refers to scores below 620, but it varies depending on the type of loan. Some mortgages allow scores of 580 or lower.
What is the easiest mortgage to get?
FHA loans are often considered easier to qualify for because they have more flexible requirements, including allowing credit scores down to 580.
Which mortgage lender is best for bad credit?
Our top mortgage lender for low credit scores is Carrington Mortgage Services because it allows scores as low as 500 on some of its loans.
Can you get a mortgage with a 500 credit score?
Some lenders offer loans that allow scores down to 500, but this can be expensive, since you'll likely have a high interest rate and you may need a large down payment.
