Best mortgage lenders for bad credit in May 2025

The homebuying process can be nerve-wracking, especially if you have bad credit.

Lenders typically want to see at least a 620 FICO score for a conventional mortgage, but some will consider applicants with poor credit. In addition, there are government-backed loans with more flexible credit requirements.

CNBC Select has picked the top mortgage lenders with flexible credit requirements based on rates, loans offered, down payment and more. (See our methodology for more details.)

Who's this for?  Rocket Mortgage is one of the nation's largest providers of FHA loans, which are available with a credit score of 500 if you put 10% down.

Standout benefits: Rocket Mortgage's Fresh Start program helps applicants boost their credit scores before applying. Rocket Mortgage has several low-down-payment options, including the ONE+ loan by Rocket Mortgage, which lets eligible borrowers put just 1% down.

Who's this for? Guild Mortgage considers borrowers without a traditional credit history by reviewing on-time rent, insurance and utility bill payments, among other sources.

Standout benefits: Guild's Zero Down mortgage combines a 3.5% FHA loan with a forgivable second mortgage to bring your down payment down to 0%. Borrowers can be approved with credit scores as low as 600.

Who's it for?Carrington Mortgage Services' non-QM Flexible Advantage loan requires a FICO score of just 550, making it a good option if you're self-employed, lack a credit history or have a bankruptcy or foreclosure in your past.

Standout benefits: Besides loans, Carrington offers various homeownership services, including real estate, title search, escrow and home insurance.

Who's this for? Citibank's HomeRun loan lets you put down as little as 3% without PMI, saving you as much as 1.5% of the loan amount per year. Citi considers non-traditional credit for HomeRun mortgages from lenders putting down at least 5%. You can also use HomeRun to refinance.

Standout benefits: Citi's Lender Paid Assistance program enables borrowers who meet income requirements to get up to $7,500 in closing-cost credits.

Who's this for? CrossCountry Mortgage boasts it can close most home loans in as little as 21 days, about half the time lenders usually take. It also accepts alternative forms of credit for specific loan products.

Standout benefits: First-time buyers who meet income or location requirements can qualify for up to $6,500 in down payment assistance from CrossCountry.

Who's this for? Navy Federal Credit Union issues mortgages to active-duty military, veterans, DoD civilian employees and their families. Borrowers can apply with non-traditional credit sources, like proof of on-time rent and utility bill payments. The banking history of existing NFCU customers is also considered.

Standout benefits: If you opt for a 0.25% rate increase, Navy Federal's 1.00% origination fee can be waived. TheMilitary Choice mortgage is similar to a VA loan (no down payment or private mortgage insurance) but sellers can contribute up to 6% of the home's value toward closing costs.

Your credit score is one of the main factors lenders look at when deciding whether to approve your mortgage application and what rate to charge you. (The others are your debt-to-income ratio, your income and employment history and the size of your down payment.)

Your credit score, in turn, is calculated based on several criteria: 

• Payment history (35%): Whether you pay your bills on time
• Credit usage (30%): The amount of credit you're using compared to your total credit limit, also known as your credit utilization rate.
• Length of credit history (15%): The length of time you've had credit
• New credit (10%): How often you apply for and open new accounts
• Credit mix (10%): Having a variety of installment loans and revolving credit accounts, including credit cards, auto loans, mortgages and personal loans

The two most significant factors come from your record of on-time payments and the amount of credit you've used, which account for 65% of your score combined.

A higher credit score tells a lender you are more likely to make on-time mortgage payments.

While many lenders prefer a 620 credit score for approval for a conventional loan, there are other options. While the federal government doesn't set credit score requirements for VA or USDA loans, these are the scores most lenders want to see.

You have some options to buy a home and have a credit score below 620.

Consider an FHA loan

FHA loans are insured by the Federal Housing Administration (FHA), so borrowers with a credit score as low as 500 can get approved if they put at least 10% down. With a 580 score, you can put as little as 3.5% down. Unlike other government-backed loans, eligibility is not limited by income, location or military service.

Save for a larger down payment

The larger your down payment, the easier it is to get a mortgage. Some lenders say they don't look for a minimum credit score but instead look at a borrower's complete financial profile. Bolstering your down payment can improve that financial profile.

Get a cosigner

If your credit is not up to snuff, you may be able to get a mortgage with the help of a cosigner with good credit and a steady income stream.

A cosigner can be anyone, including a family member or friend, who agrees to assume responsibility for the mortgage if you fail to make payments.

Getting ready to apply for a mortgage? Raising your credit score is the first step.

1. Pay bills on time

Paying credit card bills and other debts on time is the most important thing you can do to raise your score. Your payment history is 35% of your FICO® score, making it the biggest determiner in your credit score. Paying the total amount due and not carrying a balance will keep your credit utilization rate low. (Experts recommend keeping your total utilization below 30%, but below 10% is even better.)

Setting up autopay reduces the likelihood that you'll miss a payment.

2. Don't open new lines of credit

Getting a new credit card or taking out a personal loan can hurt your credit in a few ways: Applying will require a hard inquiry which can temporarily lower your score — and if you're approved, the average age of your accounts will drop.  

3. Request a credit limit increase

One way to boost your credit score is to ask your credit card servicer to increase your credit limit. Provided you don't charge anything, that will increase your available credit and lower your credit utilization rate.

4. Check for errors in your credit reports

Some 44% of consumers have found errors in their credit reports, according to an April 2024 study from Consumer Reports. It's always smart to monitor your credit reports for inaccuracies, whether they're honest mistakes or signs of fraud. You can use Aura, IdentityForce or another credit monitoring service to survey your reports from Experian, Equifax and TransUnion.

One of the largest home loan providers in the U.S., Rocket Mortgage lends in all 50 states but has no physical branches. Verified approval is available in as little as two hours, with an average closing time of 22 days.

Types of mortgages: Conventional, FHA, VA, jumbo, HomeReady and Home Possible, Rocket ONE+ mortgage, refinancing, home equity loans

Minimum credit score: 500 for FHA, 620 for conventional

Minimum down payment: 0% for VA, 1% for Rocket ONE+; 3% for conventional, 3.5% for FHA

Founded in San Diego in 1960,Guild is licensed to lend in all states except New York. Its Homebuyer Express guarantee ensures closing in 17 days or borrowers can receive $500 in closing costs (not available in Oregon). While Guild scored highly on JD Power's 2024 mortgage servicer survey, it was ranked near the bottom for mortgage origination.

Types of mortgages: Conventional, FHA, VA, USDA, jumbo, refinancing

Minimum credit score: 500 for FHA, 620 for conventional. (Guild also considers nontraditional credit sources.)

Minimum down payment: 0% for VA and Zero Down loans, 3% for conventional loans, 3.5% for FHA loans

Lending in all 50 states, Carrington Mortgage Services specializes in borrowers who face difficulty getting approval because of credit issues. In 2022, the Consumer Financial Protection Bureau fined Carrington $5.25 million for misleading customers about pandemic-era mortgage payment relief.

Types of mortgages: Conventional, FHA, VA, USDA, non-qualifying, jumbo, refinancing

Minimum credit score: 620 for conventional, 550 for USDA and Carrington Flexible Advantage, 500 for FHA and VA

Minimum down payment: 0% for VA, 3% for conventional, 3.5% for FHA

LoanDepot is one of the nation's largest nonbank mortgage originators, funding over $300 billion since its start in 2010. It scored below average in J.D. Power's 2024 U.S. mortgage origination survey, but above average for mortgage servicing.

Types of mortgages: Conventional, FHA, USDA, VA, jumbo, refinancing, HELOC

Minimum credit score: 620 for conventional, 500 for FHA

Minimum down payment: 5% for conventional, 3.5% for FHA, 0% for VA and USDA loans

Existing Citibank customers are eligible for a $500 closing credit or an interest rate discount, depending on their account balance. Unlike most preapprovals, Citibank's SureStart® agreement includes a "commitment to lend" so there are no surprises later. 

Minimum credit score: Not disclosed

Types of mortgages: Conventional, FHA, VA, jumbo loans, refinancing

Minimum down payment: 0% for VA loans; 3% for conventional loans, 3.5% for FHA loans, 10% for jumbo

CrossCountry Mortgage issues home loans nationwide and has over 600 branches for in-person service. It's routinely rated above average for both mortgage origination and servicing by J.D. Power and received an A+ from the Better Business Bureau.

Types of mortgages: Conventional, FHA, VA, USDA, jumbo, refinancing

Minimum credit score: 500 for FHA, 620 for conventional

Minimum down payment: 0% for VA, 3% for conventional, 3.5% for FHA

The largest credit union in the U.S., Navy Federal Credit Union is open to active duty service members, veterans, Reservists, Department of Defense employees and their family members. In 2024, it was the fourth-largest provider of VA loans.

Types of mortgages: Conventional, VA, Military Choice, Homebuyers Choice, refinancing

Minimum credit score: Not disclosed, although Navy Federal considers non-traditional credit sources.

Minimum down payment: 0% for VA loans, 5% for conventional loans

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

CNBC Select analyzed dozens of home loans offered by nonbank landers and both online and brick-and-mortar banks to determine which were the best for borrowers with bad credit.

We focused on the following features:

Credit score: We gave more weight to lenders who approved conventional mortgages for borrowers with less than the usual 620 FICO score required or who looked at nontraditional credit sources.

Government-backed loans: FHA, VA and USDA loans have more flexible credit requirements than conventional mortgages, so we favored lenders that offered some or all of these government-guaranteed loans.

Closing times: We gave more weight to lenders with shorter-than-average closing times or that guarantee an on-time closing.

Fees: The mortgage process includes origination, application and underwriting fees, as well as charges for appraisals, title insurance and other closing costs. When possible, we noted if a lender had lower fees, discounts or waived certain fees.

Application process: We considered whether lenders offered an online preapproval and application process and if there were physical branches for an in-person experience. 

Customer service: We favored lenders that scored highly on J.D. Power's mortgage origination and servicing surveys. We also noted if they had robust customer service phone hours and a website with an online chat feature and educational resources.

We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.

Our recommendations are sorted by best for FHA loans, best for no credit, best for non-qualifying mortgages, best for no private mortgage insurance, best for quick closing, best for military and veterans.

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