Several things can affect your credit rating. For some people, fair or poor credit is the result of not having enough credit history, while for others, major life events such as divorce or an illness take a financial toll. No matter your life story, a less than perfect credit history can affect your ability to purchase a home – but it doesn’t mean that homeownership is out of reach.

Homeownership and Credit Minimums

It’s important to note that certain loan programs have minimums for approval. A conventional loan through Freddie Mac or Fannie Mae, for example, requires a minimum credit score of 620. If you’re unsure of your credit rating, sign up for a free credit monitoring service such as Credit Karma. These programs offer monthly reports and an estimate of your credit score based on a Vantage model. Keep in mind, however, that the majority of lending decisions are made using your FICO score, which you may need to pay to purchase.

Options for Poor Credit

If you have poor credit, a loan program like the FHA loan may be a good option. These require a credit score of 580, but offer flexible options for those who meet certain income requirements.

If you have a lower credit score, you still may be able to qualify for a home based on your income, debt, and savings. A high down payment may also help your application. Keep in mind, however, that your credit score affects your interest rate. If you have less-than-perfect credit, ask your lender how your score will affect your interest rate, and how you can improve your score.