Buying a House With Bad Credit in Washington

Can I buy a house with a 580 credit score? An honest answer Why is my credit score different on Credit Karma?

"Bad credit" is doing a lot of work in that phrase. In mortgage lending it can mean five different things, and they don't all have the same fix:

• a low score with a clean recent history
• a thin file — not enough accounts to score at all
• recent lates on a file that's otherwise fine
• derogatories sitting there: collections, charge-offs, judgments
• a major event — bankruptcy or foreclosure

The first three are often fixable in months. The last two are mostly about time and program choice. Sorting out which one you actually have is the first useful thing anyone can do for you, and it's usually a fifteen-minute conversation.

The real minimums, by program

Two things to take from that table.

There is no single "minimum credit score to buy a house." There are four different answers depending on the program, and one of them is "none."

The published minimum and what a lender will actually do are different numbers. Which brings us to the part most articles skip.

Lender overlays, and why "no" isn't always no

Every lender is free to require more than the agency does, and most do. Those extra requirements are called overlays.

VA sets no minimum score; plenty of lenders won't go below 620 on a VA loan. FHA allows 500 with 10% down; many lenders won't go below 620 or 640 on any FHA file. A lender that doesn't manually underwrite can't do a sub-580 FHA loan at all, regardless of what the handbook says.

Here's the part worth knowing: sub-620 lending is not rare. In FHA's most recent fiscal year, about 13% of loans it insured — roughly one in eight — went to borrowers below 620, and that share went up from the year before.

So a decline is a data point about one lender, not a verdict on you. Shopping three is reasonable, and it costs nothing but time.

One honest counterweight: on the conventional side, low-score lending genuinely is uncommon. Recent figures put the 10th percentile of conventional purchase borrowers around 649 — meaning nine out of ten are above that. If your score is in the 500s, FHA is very likely the realistic path, not conventional, whatever the automated system now permits.

The score you're looking at probably isn't the one that counts

This catches almost everyone.

Mortgage lending doesn't use the score in your banking app. It uses older, mortgage-specific FICO versions — a different model at each bureau — pulled together in what's called a tri-merge:

• Experian: FICO Score 2
• Equifax: FICO Score 5
• TransUnion: FICO Score 4

Then the arithmetic:

• Three scores → the middle one counts.
• Two scores → the lower one.
• Buying with someone else → each person's middle score is found, and then the lowest of those is the one the loan is priced and qualified on.

That last rule surprises couples constantly. Your 720 does not average with their 610.

Credit Karma shows VantageScore 3.0. Most card apps show FICO 8. Different companies, different generations, different data snapshots. The CFPB's study on this found that about one in five people would land in a different credit tier than the score they'd been shown suggested. The direction is usually — not always — that the free score reads higher.

I'm not going to give you a point range for the gap, because the honest answer is that it varies and anyone quoting you a precise number is guessing. What I will say: don't plan around a number you got from an app. Have someone pull the real one.

One more, because it's moving: you may see articles about mortgages switching to FICO 10T or VantageScore 4.0, or dropping to two bureaus instead of three. As of now, the two-bureau change was reversed in 2025, and the new models are in a limited rollout at a small number of very large lenders. FHA has announced it will accept them but hasn't implemented it. For nearly everyone, right now, it's still classic FICO from all three bureaus.

Below the cutoff: manual underwriting

When your score is low, or you have no score, or something in the file trips the automated system, the file goes to manual underwriting. A person reads it instead of a computer scoring it.

That's slower and more demanding. It is also, frequently, how people with damaged credit actually get approved.

What FHA looks for on a manual file:

• Payment history: housing and installment debt paid on time for the last 12 months; no more than two 30-day lates in the last 24 months; no major derogatory on revolving accounts in the last 12 months. Medical is excluded from that last test.
• Ratios: the baseline is 31% housing / 43% total debt. Above 580, that can stretch to 40/50 with two compensating factors — verified cash reserves, a small increase over your current housing payment, significant additional income, or strong residual income.
• Below 580 or no score: ratios are capped at 31/43 with no stretch available.

And one rule worth quoting exactly, because it sets the boundary of what's possible: compensating factors cannot be used to compensate for derogatory credit. Reserves and a low payment shock can get you a higher ratio. They can't paper over a recent bankruptcy. Those are different problems with different fixes.

No credit score at all? That's a different problem — and often an easier one

A thin file isn't bad credit. It's no credit, and every program has a path for it using non-traditional references — bills you've been paying on time that don't report to the bureaus.

What counts: rent, utilities, phone, insurance premiums, childcare, tuition, auto leases, documented personal loans, retail accounts, and in some cases a documented savings pattern.

Two limits worth knowing. Non-traditional credit generally can't be used if you can be scored and the score is simply low — that's the previous section's problem, not this one. And it usually isn't available where there's a recent bankruptcy or foreclosure in the file.

If you've been paying rent on time for a year, start keeping the proof. It counts.

Where to actually start

Not with a credit repair company. With a real look at the file.

1. Pull the actual mortgage credit. Not the app score. This tells us which of the five problems you have.
2. Sort the fixable from the waiting. Utilization and reporting errors move fast. Derogatory events move on a clock.
3. Match the program to the file rather than the other way around.
4. Set a date. Even when the answer is "not yet," a date you can plan around beats an open question.

That's what I mean by credit coaching. It's free, there's no application, and there's no judgment in it — I've been doing this through several market cycles and there is very little I haven't seen.

The conversation is always free.

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What this looks like for a real household

Common questions