In reality, you don’t need to have flawless credit to qualify for first-time home buyer programs. A tri-merge credit report provides the lender with detailed information and credit scores from all three credit bureaus combined into a single merged report. When using a tri-merge credit report, it’s common for lenders to use the middle of the three credit scores. When you have more than one borrower, the lowest of all the middle scores is used for qualification purposes.
When it comes to looking for a conventional mortgage, you may need a slightly higher score of around 680. However, your odds of getting approved are better with lower debt to income ratios and higher credit scores.
For active-duty members, veterans, and their spouses, a VA loan comes with lower interest rates, doesn’t require a down payment, and works well for first-time home buyers with less- than-perfect credit.
These borrowers may also qualify for first-time home buyer assistance depending on the program, grant, and location of the property being purchased.