The Credit Score Myth That’s Holding Would-Be Buyers Back

Do you really need excellent credit to buy a home?

The short answer: no.
A less-than-perfect credit score doesn’t automatically disqualify you from homeownership, even though many would-be buyers believe it does.

If buying your first home has felt “out of reach” because of credit concerns, this misconception may be the very thing slowing you down.

Why So Many Buyers Think They Can’t Qualify
A surprising number of renters aren’t choosing to wait—they think they have to.

According to a Bankrate survey, 42% of Americans believe you need excellent credit to qualify for a mortgage. When renters are asked why they don’t own yet, one of the most common answers is simple and discouraging:
“My credit isn’t good enough.”

If that sounds familiar, you’re not alone. Many first-time buyers check their credit score, compare it to what they assume lenders require, and quietly take themselves out of the running before ever having a real conversation.

The problem is that this belief is built on a misunderstanding of how mortgage qualification actually works.

Where the Credit Score Myth Comes From
Part of the confusion comes from looking at today’s average buyer and assuming that’s the minimum requirement.

Data from the New York Federal Reserve shows the median credit score for recent homebuyers is 775. That’s a strong number, and it’s easy to see how it fuels the idea that only buyers with near-perfect credit are getting approved.

But here’s the key distinction:
Median does not mean minimum.

A median simply reflects the middle of the pack—not the entry point.

When you look closer at the data, a meaningful share of buyers purchased homes with credit scores well below that 775 benchmark. In fact, buyers in the lower 10th percentile had median scores around 660, meaning many approved buyers landed in the 600s.

That alone should challenge the idea that buying a home is reserved only for people with flawless credit histories.

There Is No Universal “Magic Number”
One of the biggest misconceptions in real estate is the idea that lenders all use the same credit cutoff.

They don’t.

FICO, one of the most widely used credit scoring models, makes this clear:

"While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single ‘cutoff score’ used by all lenders, and there are many additional factors that lenders may use…”

In plain terms, your credit score is one part of a much larger picture.

Lenders also look at:

• Income stability
• Debt-to-income ratio
• Employment history
• Cash reserves
• Overall financial behavior

That’s why two buyers with the same score can have very different outcomes—and why assuming you’re disqualified without asking is often a mistake.

Why Waiting “Until My Credit Is Perfect” Can Backfire
It’s completely reasonable to want your finances in the best shape possible before buying. But waiting for a perfect score can unintentionally keep you stuck longer than necessary.

Here’s why:

Credit improvement is rarely linear. Small changes—paying down balances, correcting reporting errors, adjusting utilization—can move your score enough to open doors you didn’t realize were already close.

More importantly, some buyers could qualify today, even if their score isn’t where they eventually want it to be.

Without talking to a knowledgeable lender, you’re making a decision based on assumptions rather than facts. And in a shifting market, waiting unnecessarily can mean missing opportunities that align with your timeline, budget, or long-term plans.

The Smart First Step Isn’t a Commitment—It’s a Conversation
One of the most important things to understand is this:
Talking to a lender doesn’t lock you into buying a home.

It gives you clarity.

A good lender can help you:

• Understand where you truly stand
• Identify realistic loan options
• Map out a short-term plan if improvement is needed
• Avoid guesswork and misinformation

At The McClung Group, we see this often with buyers in The Woodlands. Once they have real numbers and a clear path, the process feels far less intimidating—and far more achievable.

If credit has been the reason you’ve been waiting, the next move isn’t to keep waiting. It’s to get informed.

How The McClung Group Helps Buyers Move Forward
As Realtors serving The Woodlands, we believe buying a home shouldn’t feel like a mystery test you’re afraid to fail.

Our role isn’t just to show homes. It’s to help you understand the process, connect you with trusted professionals, and give you honest guidance—whether you’re ready now or planning ahead.

That often starts with a simple conversation:

• What does buying look like for you?
• What’s realistic in your current situation?
• What steps would actually move the needle?

If your credit score has been the mental roadblock, this is your sign to replace assumptions with real answers.

Final Takeaway
Your credit score matters—but it doesn’t have to be perfect.

A large number of buyers are purchasing homes without “excellent” credit, and lenders evaluate far more than a single number. If credit concerns have kept you on the sidelines, it may be time to take another look at what’s possible.

You don’t need everything figured out to start. You just need the right information.

The McClung Group

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