Credit guide
What credit score do you need to buy a house in Michigan?
Short answer
The credit score you need depends on the loan: 500–580 for FHA (3.5% down at 580, 10% below that), 620 for conventional, and 640 for MSHDA down payment assistance in Michigan. VA and USDA loans have no federal minimum, though lenders usually want 620. Your rate improves at 680, 700, and 740 — so even after you qualify, a few more points can meaningfully lower the payment.
Minimums by loan type
Michigan's practical credit tiers line up with loan programs.
- FHA: 580 for 3.5% down, or 500–579 with 10% down at lenders who allow it
- Conventional: starts at 620
- MSHDA assistance: requires 640 — stricter than FHA
- VA and USDA: no federal floor, but most lenders apply their own 620ish overlay
How your score affects the rate
Qualifying is only the first step — pricing improves in tiers above your minimum. Moving from 660 to 700, or 700 to 740, can shave your rate and cut mortgage insurance costs, worth real money over a 30-year loan.
That's why it's often smart to spend a few months lifting your score before applying, even if you technically already qualify. The gap between a 640 and a 740 borrower on the same loan can be substantial.
Raising your score before you apply
If you're near a threshold, focus on the fastest-moving levers:
- Pay revolving balances below 30% utilization
- Make every payment on time
- Don't open new credit before applying
- Dispute genuine errors on your report
For thin files — little history rather than damaged credit — some Michigan lenders use manual underwriting to document rent and utility payments. A few months of discipline is usually cheaper than any 'bad credit' loan product.