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Subprime Credit Loans

Home Loan Lender for Individuals with 600 or Below Credit


While mortgage credit availability has improved along with the economy, many potential buyers with credit below 600 will still face difficulty qualifying for a loan. If your FICO score is less than 600, it may be difficult for lenders to give you a home loan; but this does not mean you cannot get a mortgage. 

People with credit issues can still realize the dream of homeownership. If you can, spend at least six months working on your credit score by paying down debt and trying to get collections accounts removed before you apply for a loan to give you more options and greater savings. 

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Getting a Loan with 600 or Below Credit

Before you even apply, order free copies of your credit reports and check that they are accurate. This means reviewing the accounts, balances, payment history, names, dates and more against your records. If you spot mistakes, dispute them with the credit bureau, provide any documentation you have, and wait at least a month to make sure the errors are removed or corrected.

To help make up for your low credit score, demonstrate steady income that is sufficient to pay the loan. Eliminate as much debt as possible, as a high debt-to-income ratio will make it even harder to get a loan. Having very little or no other outstanding debt will make your loan application seem stronger.

The next step to strengthening your application is paying as much as you comfortably can on the down payment. This demonstrates you are making an investment in the home and have "skin in the game," improving the chances that you will stay current on the loan. You may even be able to find programs that offer down-payment assistance to help.

We will likely ask you for written explanations for any negative marks on your credit, such as collections or late payments. Be prepared to explain any financial difficulties you had, particularly if the problems were only temporary, such as divorce or illness.

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Steps to Improve Your Credit 


It is always a good idea to do what you can to improve your credit before you apply for any loan, especially a mortgage. Even if you have a good credit score, boosting it even a few points can potentially secure you a lower interest rate or better terms.

Start by requesting free copies of your TransUnion, Equifax and Experian credit reports at Look for any mistakes or errors and dispute them right away. Avoid opening any new credit accounts before you apply for a mortgage, or until the loan is closed. Do not close any accounts, even if you do not use them.

Reduce the balances of all credit cards to use no more than 15 to 20 percent of any one card, and no more than 20 percent of your total credit limit. Make an effort to use all credit cards you have for even small purchases and then pay them off so the accounts report as active.

To strengthen your application, improve areas other than your credit by building up your savings, and keep your job for at least two years, if possible, before applying.

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Additional Information to Consider and Options


If you have trouble qualifying for a standard loan, consider the following options:

  • Lease with an option to buy
  • Consider getting a cosigner on your mortgage
  • Ask us about rapid rescoring, a method of rapidly improving your credit score to qualify for a loan because of incorrect information on your credit report (This does not work for everyone and is only in certain circumstances.)
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