Credit: Marje/Getty Images; Illustration by Issiah Davis/Bankrate
If your credit needs work, that doesn’t necessarily mean you won’t qualify for a mortgage. There are lenders and loan programs for borrowers with bad credit, including FHA loans. Here’s our guide to the best mortgage lenders for bad credit in 2025.
Best mortgage lenders for bad credit
| Lender | Credit requirements | Down payment minimum | Bankrate Score |
|---|---|---|---|
| Veterans United Home Loans | 620 for conventional loans and VA loans | 3% for conventional loans; 3.5% for FHA loans; none for VA loans or USDA loans | 4.9 |
| Wells Fargo | 620 for conventional loans | 3% for conventional loans; 3.5% for FHA loans, none for VA loans or USDA loans | 4.8 |
| Bison State Bank | 620 for conventional loans; 580 for FHA loans and VA loans | 3% for conventional loans; 3.5% for FHA loans, none for VA loans or USDA loans | 4.8 |
| New American Funding | 620 for conventional loans | 3% for conventional loans; 3.5% for FHA loans; none for VA loans or USDA loans | 4.6 |
| Old National Bank | 620 for conventional loans | Undisclosed | 4.5 |
| Rate | 620 for conventional loans | 3% for conventional loans; 3.5% for FHA loans; none for VA loans | 4.5 |
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional loans and VA loans
- Down payment minimum: 3% for conventional loans; 3.5% for FHA loans; none for VA loans or USDA loans
- Where to find: Branch locations and online
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Pros
- Specializes in VA loans
- 24/7 customer service over the phone
- Lower rates than the national average
Cons
- No HELOCs or home equity loans
- Limited number of branches
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Veterans United Home Loans scores well for affordability, availability and borrower experience, and we selected it as the best lender for bad- or lower-credit borrowers in the 2025 Bankrate Awards. Veterans United primarily works with VA loan borrowers, but it also offers conventional mortgages and other government-backed loans with relatively lower credit score requirements. Notably, the lender also provides free credit consulting for service members.
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- 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 loans or USDA loans
- Where to find: Branch locations and online
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Pros
- Displays mortgage rates online
- Massive branch network
- Will consider non-traditional credit references in application process
- Offers low-down payment options to assist lower-income borrowers
Cons
- Dialed back its mortgage offerings
- No longer offers home equity lines of credit (HELOCs)
- Below-average customer satisfaction scores and negative past customer reviews
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Wells Fargo scores well for affordability, availability and borrower experience. If you’re already a banking customer, you could get a mortgage through one of the bank’s government-backed loan programs, which typically have more flexible credit requirements.
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- 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 loans or USDA loans
- Where to find: Branch locations and online
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Pros
- Customized online quote tool
- No origination or hidden fees
Cons
- Preapprovals take slightly longer compared to other lenders
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Bison State Bank scores well for affordability and availability. The bank offers FHA, VA and USDA loans on home purchases, which you could qualify for even with a lower credit score. It’s also a community bank, which might translate to more personalized service.
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- 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 loans or USDA loans
- Where to find: Branch locations and online
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Pros
- More than 270 branch locations
- Financing initiatives for Latino, Black and LGBTQ+ buyers
- Wide range of loan options, including programs for self-employed borrowers and USDA loans
- All-cash buying program
Cons
- Lowest advertised rates require paying points and a hefty 40% down payment
- Doesn’t disclose lender fees online
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New American Funding scores well for affordability and availability. Along with providing lower-credit FHA, VA and USDA loans, this lender is willing to work with borrowers who have a bankruptcy or other blemish in their credit history.
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional loans
- Down payment minimum: Undisclosed
- Where to find: Branch locations and online
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Pros
- Branches plus online banking
- First-time homebuyer and down payment/closing cost assistance programs in some states
- Special loan programs for first responders, professors and physicians
Cons
- Branch locations limited to eight states
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Old National Bank scores well for affordability and availability. The bank works with eligible borrowers nationwide on a range of loan options, including FHA, VA and USDA loans that tend to come with more lenient credit requirements.
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA
- Credit requirements: 620 for conventional loans
- Down payment minimum: 3% for conventional loans; 3.5% for FHA loans; none for VA loans
- Where to find: Branch locations and online
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Pros
- Borrowers can get approved in just one day
- Rates are advertised online for easy comparison
- Branch locations in the majority of states
Cons
- No USDA loans
- Minimum borrower requirements not listed online
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Rate (formerly Guaranteed Rate) scores well for affordability and availability. While the lender doesn’t provide every type of government-backed loan, it does specialize in FHA loans, which have a lower credit threshold compared to conventional loans. In fact, we named it the best lender for FHA loans in the 2025 Bankrate Awards.
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, which could translate to several thousand more in interest over the life of your mortgage.
Say you’re obtaining a $380,000, 30-year mortgage with a fixed 7 percent rate. Your monthly payment would be $2,528 (excluding homeowners insurance premiums and property taxes), and you’d pay $530,134 in interest over the 30-year loan term.
If you were to improve your credit and get a lower rate of 6.5 percent instead, your monthly payment would drop to $2,402, and you’d pay $484,669 in interest for the duration of the loan. Aside from the monthly payment savings of about $125, that’s a total interest savings of approximately $45,000.
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. FHA loans, for example, have a lower minimum credit score requirement than conventional loans.
- 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.
FAQ
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If you have poor credit, consider an FHA loan, which allows for credit scores as low as 580 (or 500 if you can make a 10 percent down payment on the home). If you’re eligible, a VA loan (for service members and veterans) or a USDA loan (for buyers in rural areas) might also be easier to qualify for. 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.
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The lowest credit score 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 loans have a lower minimum credit score requirement than conventional loans, and might make more sense for you if your credit needs improvement.
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There are many ways to boost your credit score. First, review your three credit reports from the credit reporting bureaus at AnnualCreditReport.com. If you spot any errors or inaccuracies, contact the reporting agency as soon as possible to dispute. Once you have your scores, create a plan of attack for debt. Likewise, be sure to pay all of your bills on time and in full, if possible. 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.
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To determine the best mortgage lenders for low-credit score borrowers, Bankrate periodically evaluates more than 75 lenders for factors relating to affordability, availability and borrower experience, assigning each a Bankrate Score out of five stars. The best mortgage lenders for low-credit score borrowers generally have a Bankrate Score of 4.5 stars or higher. Learn more about our methodology.
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