A 600 credit score puts you in an awkward spot. Lenders will happily talk to you, but the cheapest loan programs are closed off. You’ll get a mortgage — it just won’t be the one your neighbor with a 780 scored.
For most buyers sitting at 600, an FHA loan is the best fit. It has the lowest credit floor of any mainstream program, allows 3.5% down, and underwriters are accustomed to seeing bruised credit. That said, FHA isn’t automatically correct. Veterans should look hard at VA loans, rural buyers should check USDA, and anyone who can reach 620 in a couple of months may want to hold off before signing.
Why 600 Narrows Your Options So Sharply
Each loan program runs on its own credit rules, and 600 sits just below the line that conventional lenders care about.
- Conventional loans: Fannie Mae and Freddie Mac require a 620 minimum. At 600 you’re locked out of standard conventional financing, though a handful of portfolio lenders will make exceptions at a price.
- FHA loans: 580 minimum with 3.5% down. Between 500 and 579, you can still qualify with 10% down.
- VA loans: No minimum set by the VA itself, but most lenders layer on a 580 or 620 requirement.
- USDA loans: Automated approval usually wants 640, though manual underwriting can work at 600 with a strong file.
Your score also sets your price. The gap between the top credit tier and the 580–619 band typically runs one to 1.5 percentage points on a 30-year loan, and this look at how mortgage rates shift across credit score tiers shows what that difference really costs over time.
FHA Loans: The Default Answer at 600
FHA has been the go-to mortgage for lower credit scores since the 1930s, and at 600 it remains the path of least resistance. You need 3.5% down, a score of at least 580, and a debt-to-income ratio underwriters can live with — generally 43% or under, though automated approval stretches toward 50% when the rest of the file is solid.
FHA charges mortgage insurance in two pieces. There’s an upfront premium of 1.75% of the loan amount, which you can roll into the balance. Then there’s an annual premium of 0.55% for most buyers, billed monthly.
On a $300,000 loan, that’s $137.50 a month. Here’s the sting: with only 3.5% down, the annual premium stays for the life of the loan, and refinancing is the only exit. Put 10% down instead and the premium drops to 0.50% and falls off after 11 years. Same loan, very different long-term bill.
FHA also has limits on the size of loan it will insure — roughly $524,000 in most of the country for 2025, higher in expensive metros. Unless you’re buying well above your area’s median home price, that ceiling won’t get in the way.
Where FHA clearly loses: if you’re a veteran, a service member, or a surviving spouse, a VA loan beats it almost every time. If the property sits in a rural area, USDA is cheaper still.
VA and USDA: The Programs People Forget
VA loans carry no credit minimum set by the VA, no down payment requirement, and no monthly mortgage insurance. On a $300,000 loan at 6.5%, principal and interest come to roughly $1,896 a month. Run the same loan through FHA and you’re at about $1,946 plus $137.50 in insurance — around $190 more every month for a borrower with identical credit.
There’s a funding fee of 2.15% for first-time use with nothing down, but it can be financed into the loan, and it’s waived entirely for borrowers with a service-connected disability rating.
USDA is the rural cousin. Zero down, a 1% upfront guarantee fee, and an annual fee of 0.35% — comfortably below FHA’s. The trade-off is geography and household income limits. Most eligible properties sit outside metro centers.
What a 600 Credit Score Costs You Monthly
Numbers make this real. Say you’re borrowing $300,000 on a 30-year fixed loan.
- FHA at 600: around 6.75%, or $1,946 in principal and interest, plus $137.50 insurance — about $2,084 a month.
- Conventional at 760: around 6.25%, or $1,847 in principal and interest, with no mortgage insurance once you’re past 20% equity.
That’s a $237 gap, or roughly $2,840 a year, for identical houses next door to each other. Rates move weekly, but the credit penalty is stubbornly consistent. Borrowers one tier lower feel it even harder — mortgage rates at a 580 credit score show how steep that next step down becomes.
Getting Approved at 600 When the File Is Thin
A 600 alone won’t sink an application. What sinks it is a 600 paired with a 55% debt-to-income ratio, no savings, and a collection account from four months ago. Underwriters review the whole picture, and FHA’s manual underwriting guidelines exist precisely to handle borrowers like this.
Factors that push a borderline file toward approval:
- Debt-to-income under 43%, with housing costs at or below 31% of gross income
- Cash reserves — one to two months of full mortgage payments sitting in the bank
- Twelve months of verified on-time rent, shown through bank statements or a landlord letter
- Two or more years with the same employer
- No new collections, charge-offs, or late payments in the past year
- A larger down payment, which lowers the lender’s risk and can offset a weak score
Lenders also weigh what you’ve done since your credit trouble. A settled collection plus 18 months of clean history reads very differently from an active charge-off. Knowing what bad-credit buyers really pay in interest and fees helps you set realistic expectations before you start shopping.
The Fastest Ways to Push 600 Toward 620
Twenty points is often the difference between FHA and conventional financing — and conventional loans don’t carry FHA’s lifetime insurance premium. Your quickest lever is credit utilization, which makes up about 30% of your FICO score.
- Pay down revolving balances. Dropping from 60% of your limits to 20% can move a score 20 to 40 points within two billing cycles.
- Leave old cards open. Closing a card you’ve held for years shortens your credit history and pushes utilization up.
- Dispute genuine errors. Wrong balances and duplicate collections appear more often than people expect.
- Ask to be added as an authorized user. A relative’s aged, well-managed account can transfer some positive history to your file.
- Request a rapid rescore. Once a payoff posts, your lender can have the bureau refresh your score in three to five business days.
- Stop applying for new credit. Each hard inquiry costs a few points, and lenders notice clusters of them.
Buy Now With FHA, or Wait for a Better Score?
This is the real decision, and it hinges on how long the wait would be and what rent costs you in the meantime.
Waiting six months to hit 620 opens conventional financing with just 3% down through programs like HomeReady or Home Possible. The rate may be slightly lower than FHA’s, and private mortgage insurance drops off automatically at 20% equity instead of sticking around forever. Over ten years, that’s meaningful money.
But six months of rent at $1,800 is $10,800 that builds no equity, and home prices in most markets haven’t been sitting still. If it would take a year to reach 620, buying with FHA now and refinancing later usually wins. If you’re 15 points away with cash to throw at your balances, waiting three months is the smarter play.
Get Two Pre-Approvals, Not One
Pricing at a 600 credit score varies far more than it does at the top of the range. Lenders set their own credit overlays, their own risk-based adjustments, and their own appetite for imperfect files. Two quotes on the same loan can differ by half a percentage point — about $90 a month on a $300,000 mortgage.
Apply with an FHA-focused lender and at least one credit union or community bank. Ask each for a Loan Estimate and compare the APR, which folds in the mortgage insurance and fees that headline rates conceal. Cross-check those quotes against the rate tiers lenders use for your score band so you know whether an offer is fair. Then ask what score would unlock conventional financing and how much it would save you. Sometimes the answer is small. Sometimes it changes which house you can afford.