What Credit Score Do You Need for a $400000 House?Buying a $400,000 house is a huge milestone. It’s a step that helps build long-term wealth. But before choosing paint colors or measuring the size of a new sofa, there’s one thing to consider—your credit score.
Lenders use this 3-digit number to decide whether you’re a safe borrower or a financial risk. According to CNBC, your credit score not only determines whether you’ll get a loan, but also the interest rate. In the long term, this one number could save you tens of thousands of dollars or make extra payments over the next 30 years.
The Quick Answer: What’s the Magic Number?
For a $400,000 home, you generally need a minimum credit score of 620 for a conventional loan and 580 for an FHA loan. But if you want the lowest interest rate and the best deal, ideally aim for a score of 740 or higher.
Minimum Credit Scores by Loan Type
Not every mortgage is the same. Depending on your financial history, some loans are easier to obtain, while others are a little tougher. According to LendingTree, conventional loans are a little stricter, while government-backed loans help first-time buyers or those with weaker credit.
Here is a breakdown of what you’ll likely need:
| Loan Type | Minimum Score | Down Payment Notes | Best For |
| Conventional | 620 | 3–5% minimum | Those with good credit and steady income. |
| FHA | 580 (or 500 w/ 10% down) | Low down payment (3.5%) | First-time buyers or lower scores. |
| VA | 620 (typical) | 0% down possible | Veterans and active military members. |
| USDA | 640 (typical) | 0% down | Homebuyers in designated rural areas. |
Technically, you can get a loan with a 580 score. But Zillow recommends aiming for a “sweet spot” of 740+. The reason is simple – you don’t want to pay extra interest every month for the next 30 years..
Why Your Score Matters for a $400k Mortgage
It might seem like a few points on your credit score wouldn’t make much of a difference, but on a $400,000 loan, these small points are quite expensive. A higher credit score has a direct benefit—a lower interest rate, which significantly reduces your monthly EMI.
Let’s look at the math:
If your credit score is 700 (based on the January 2026 market), you could get an interest rate of around 6.58%. In this case, your principal and interest combined would amount to approximately $2,540 per month
But according to Experian, if your score is in the 620–680 range, the interest rate can easily be 7.5% or even higher. This “small” difference adds up to hundreds of dollars extra each month, and over $50,000 in extra interest over the entire loan tenure. This is money you could have put toward retirement or your children’s college fund.
Lenders also look at your debt-to-income (DTI) ratio—they usually want it to be less than 43%. But The Mortgage Reports says that credit score still plays the biggest role in the approval process. In simple words, credit score is king.
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How to Boost Your Credit Score Fast
If your score is a little low right now, there’s no need to panic. You’re not stuck there. If you take the right steps, you could see a significant jump in 30 to 90 days. Step one — check your credit report at AnnualCreditReport.com. Sometimes old or bad “ghost” debts are dragging your score down unnecessarily.
According to Bankrate, these are some of the most effective steps you can take right now:
- Set Autopay: Payment history accounts for approximately 35% of your score. Even one late payment can ruin months of hard work.
- Reduce Balances: Try to keep your credit utilization below 30%. If the total credit limit is $10,000, ideally don’t carry a balance greater than $3,000
- Stop Applying for New Cards:Every hard inquiry takes a slight hit to your score. If you’re rate shopping for a mortgage, try to complete everything within 45 days to avoid a significant impact on your score.
- Be an Authorized User:If you have someone in your family with a perfect payment history, ask them to add you as an authorized user on their oldest credit card. You don’t even have to physically use the card—their years of good habits benefit your credit score.
Equifax has shared examples where borrowers increased their score from 610 to 650 within two months by paying down just $5,000 in credit card debt. This small move can sometimes make all the difference between a “no” and a “welcome home.”
Other Factors Lenders Consider Beyond Credit
Credit is important, but it’s not everything. Lenders take a close look at your income and down payment when purchasing a $400,000 home.
According to Redfin, to comfortably afford a home in this price range, your annual income should ideally be $100,000 or more. This allows you to follow the “28% rule,” which means your housing costs should not exceed 28% of your gross monthly income.
- The Down Payment:Down payment is also a big factor. You can get by with a 3.5% down payment on an FHA loan, but if you make a 20% down payment ($80,000), you can avoid Private Mortgage Insurance (PMI). This can save an extra $150–$300 per month.
- Pre-Approval is Key:Pre-approval is crucial. Don’t go to open houses just by checking your credit score on a free app. Talk to at least three different lenders. You can’t even imagine how much rates vary between banks.
- The Math Matters:The math is real. A 740 credit score with 6.5% interest keeps life manageable, while a 620 score and a 7.5% interest rate can quickly become a financial burden that restricts your lifestyle.
Final Thoughts on Landing Your $400k Home
One last thing: If your credit score is 620 or above, a $400,000 home could be within your reach. Whether you plan for an FHA loan or a conventional loan, the best thing you can do now is strengthen your credit habits and get proper pre-approval.
Every extra point in your credit score today puts money back in your pocket tomorrow. Spend some time polishing your finances, and then start your home search confidently—like a buyer who knows they’re getting the best deal. Better.com also recommends consulting a lender at an early stage as they can provide a clear roadmap for your financial situation, so you’re not left guessing in the dark.
Common Questions About Buying a $400k Home
1-Can I buy a $400,000 house with a 500 credit score?
It’s a “maybe,” but it’s an uphill battle. Technically, the FHA allows for a score as low as 500, but you’d be required to put down at least 10%. However, many individual lenders (the people actually cutting the check) have their own “overlays,” meaning they might still require a 580 or 620 regardless of what the FHA says. If you’re at 500, your first priority should be bumping that score up to avoid a massive interest rate.
2-Does checking my credit score lower it?
When you check your own score on an app or through your bank, it’s a “soft inquiry” and does zero damage. However, when a mortgage lender pulls your credit to pre-approve you, it’s a “hard inquiry,” which can dip your score by a few points. The good news? If you talk to three different lenders within a 45-day window, Google and the credit bureaus treat it as one single “event” to help you shop for the best rate without tanking your score.
3-What if I have a high credit score but a lot of debt?
This is a common trap. You could have an 800 score, but if your monthly car payments, student loans, and credit card minimums take up 50% of your income, a lender will likely turn you down. They want to see that your total debt (including the new house) stays under 43% of your gross monthly income.
Disclaimer:The information provided in this article is for educational and informational purposes only. It should not be construed as professional financial, investment, or legal advice.Mortgage rates, lender requirements, and credit scoring models change significantly over time. Therefore, always consult a licensed mortgage professional or financial advisor before making any major financial decisions.The math examples provided are estimates based on market conditions as of January 2026. Actual numbers may vary slightly depending on your location and personal financial profile.