Best Mortgage Lenders For Bad Credit in April 2026

A bad credit score can make the homebuying process particularly challenging, as most mortgage lenders require a FICO^® Score of at least 620 for a conventional home loan.

The good news is that some lenders will consider applicants with less-than-perfect credit. There are also government-backed loans with flexible credit requirements and some lenders that review criteria beyond your credit score.

CNBC Select has named the top mortgage lenders for bad credit in a variety of categories, including FHA loans, speedy closings, military homebuyers and borrowers with no credit. For more details on how we made our selections, see our methodology.

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. The online lender also offers several low-down-payment options, including the ONE+ loan from Rocket Mortgage, which lets eligible borrowers put down 1%.

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, 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, which can cost 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 receive 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 typically 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. Existing NFCU customers’ banking history is also taken into account.

Standout benefits: If you opt for a 0.25% rate increase, Navy Federal’s 1.00% origination fee can be waived. The Military Choice mortgage is similar to a VA loan in that there’s 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 primary factors lenders consider when deciding whether to approve your mortgage application and what interest rate to charge.

Most lenders prefer a 620 credit score for a conventional mortgage, but there are other options for borrowers with lower scores, including government-backed FHA, VA and USDA loans.

There are different credit scoring models, but the FICO Score is the most widely used. It’s determined by reviewing your credit reports from the three main credit bureaus and assigning weights to different factors.

• 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 important factors are your on-time payment history and the amount of credit you’ve used, which together make up 65% of your score. A higher credit score shows a lender you’re more likely to make on-time mortgage payments.

You have some options for buying a home even if your credit score is below 620.

FHA loan

FHA loans are insured by the Federal Housing Administration (FHA) and accept borrowers with a credit score as low as 500 to be approved with 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 don’t just look at a borrower’s credit score; they examine their complete financial profile. Bolstering your down payment can improve that financial profile.

Get a co-signer

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

A co-signer 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 accounts for 35% of your FICO score, making it the largest factor in determining 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 negatively impact your credit in several ways: applying for one results in a hard inquiry, which can temporarily lower your credit score. 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

According to a 2024 Consumer Reports study, 44% of consumers have found errors in their credit 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.

At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. 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 independently of our commercial team and any outside third parties, and we pride ourselves on maintaining high journalistic standards and ethics.

CNBC Select analyzed dozens of home loans offered by online and brick-and-mortar banks, credit unions and nonbank lenders 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 FICO Scores below 620 and who considered 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 appraisal, title insurance and other closing costs. When possible, we noted if a lender had lower fees, discounts or grants or if they waived certain fees.

Application process: We considered whether lenders offered an online preapproval and application process and whether they had physical branches for in-person applications. 

Customer service: We favored lenders that scored highly on J.D. Power’s mortgage origination and servicing surveys. We noted whether they had robust customer service phone hours and a website or mobile app 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.

Based on this criteria, our picks for the best mortgages for borrowers with bad credit are:

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