Would-be homebuyers aren’t avoiding the market because they don’t want a home; they’re staying out because they believe they can’t. Often, it’s their credit score standing in the way.

A Bankrate survey found that about 2 in 5 Americans (42%) think you need excellent credit to get a mortgage. That belief likely explains why many renters say they haven’t bought a home yet; “my credit isn’t good enough” is a common reason.

Maybe that sounds familiar — you check your score, it’s lower than you hoped, and you figure buying your first home isn’t realistic at the moment.

Here’s what you should know.

A lot of people think you need perfect credit to buy a house, but that’s not always true.

You Don’t Need Perfect Credit To Buy a Home

Where did this myth start? A big reason is that today’s typical homebuyer actually has a pretty high credit score — the NY Fed finds the median score for buyers is 775.

That doesn't mean you actually need that high of a score to qualify.

Several recent homebuyers managed to secure mortgages with credit scores below the typical cutoff. About 10% of scores clustered around 660 — meaning some buyers had higher scores and some lower — and the median in that bottom 10th percentile sits roughly in that range (see graph below).

Even if your score isn’t where you’d like it to be, it doesn’t mean your chances are over. FICO says there isn’t one single credit score you must have to buy a home.

““While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single ‘cutoff score’ used by all lenders, and there are many additional factors that lenders may use . . .”
”

— FICO

Talk with a trusted lender to find out what’s doable for you — many buyers are getting loans with credit scores in the 600s, so you might be able to as well.

 Bottom Line

Your credit score matters — but it doesn't have to be flawless.

If credit has held you back from buying a home, now could be a good time to revisit your options. If you'd like help figuring out your current standing and the best next steps, reach out to a local lender.

You don’t need to have all the answers to start the conversation.