The average credit score to buy a house in 2020

Written by: Paris Ward

A review of Credit Karma members shows the average VantageScore 3.0® credit score across the U.S. for those who opened any type of mortgage tradeline in the past two years is 717.

Looking at VantageScore 3.0 credit scores from TransUnion for tens of millions of Credit Karma members who had a mortgage tradeline open on their credit report in the past two years, we also studied the average VantageScore 3.0 credit score among homebuyers state by state.

Our findings: Average credit scores ranged from 683 (Mississippi) to 739 (New Hampshire and Washington state). The range of scores was even wider when broken down by city. (Learn more about our methodology.)

Want to know more?

• What’s the minimum credit score you need by mortgage loan type?
• What’s the average credit score for people with mortgages in your state?
• At a glance: Additional key findings
• By city: Where do mortgage holders have the highest and lowest average credit scores?
• By state: Where are homeowners borrowing the most for homes?
• Millennials: The most in-debt homeowners?

What’s the minimum credit score you need by mortgage loan type?

Before we dive into the average credit scores for recent homebuyers, you may be wondering what the minimum credit score is for a mortgage in 2020. The answer is that it depends on the type of mortgage.

Below is a breakdown of the minimum FICO ® scores typically required, based on type of mortgage loan — Federal Housing Administration loans (FHA loans), U.S. Department of Veterans Affairs loans, or conventional loans through a private lender that are insured through Freddie Mac or Fannie Mae.

Note that the minimum scores listed above are for FICO credit scores, specifically — this is the scoring model mortgage lenders typically turn to when considering applications.  

What’s the average credit score for people with mortgages in your state?

While it’s common for mortgage lenders to look at FICO scores in their application review process, we turned to Credit Karma’s vast collection of VantageScore 3.0 data to get a broad picture of the credit health of people getting mortgages. (Find out more about the similarities and differences between credit-scoring models.)

Below, you can see the average TransUnion VantageScore 3.0 credit score of homeowners in each state (plus Washington, D.C.) who recently opened a mortgage.

In general, people in the Northeast or on the West Coast who got mortgages had VantageScore 3.0 credit scores averaging 720 or above — on the higher end of the spectrum.

On the flip side, the Gulf Coast, Midwest and Southern coastal states tended to have some of the weakest average credit scores (700 or lower).

At a glance: Additional key findings

By city: Where do mortgage holders have the highest and lowest average credit scores?

The average VantageScore 3.0 credit score for mortgage openers varies even more widely from city to city — from 657 to 782. Below are the 10 cities where recent homebuyers have the highest average credit scores and the 10 cities where they have the lowest average credit scores.

On the whole, homebuyers on the West Coast have the highest average credit scores, while homebuyers in Southern and Midwestern cities have the lowest credit scores, on average. This may be a reflection of the vast differences between the real estate markets in these areas — with the West Coast naturally drawing buyers with stronger credit profiles overall due to exceptionally high real estate costs.

Remember that VantageScore 3.0 credit scores aren’t the scores most mortgage lenders use when making lending decisions, but they can still help give you an idea of recent homebuyers’ credit health.

By state: Where are homeowners borrowing the most for homes?

No matter where you live in the U.S., there’s no denying it — buying a home is a big expense. Based on our analysis of Credit Karma members, the average open mortgage balance for mortgages that are two years old or less is $196,035. This indicates that there may be certain places where homebuying is significantly more expensive than others.

For example, recent homebuyers borrowing in West Virginia have a mortgage balance of $126,321, while borrowers in Hawaii have an average mortgage balance of $384,524 — more than three times as much.

Overall, our analysis shows that homeownership is significantly more expensive along the West Coast and Northeast, while homes remain more affordable throughout the South and Midwest.

Millennials: The most in-debt homeowners?

According to our analysis, millennials are the generation with the highest average open mortgage balance.

The average age of Credit Karma members with recently opened mortgages across the U.S. was 40, making the average mortgage opener a member of Gen X.

However, in several major cities, including Boston, San Francisco, Seattle and Minneapolis, the average age was 35 to 38 — meaning the average mortgage was opened by a millennial. With more millennials aging into their late 30s, demand for mortgages across the U.S. could soon rise.

Methodology

For this analysis, we studied aggregate VantageScore 3.0 credit score data from TransUnion for Credit Karma members who — during the period from Aug. 1, 2020, to Aug. 31, 2020 — had an open mortgage balance on their account that had been reported on their credit report for 24 months or less. We then looked at the amounts of the mortgages they had opened during that time period. Location and age data is based on information included in members’ TransUnion credit reports and were studied in aggregate for this analysis. We analyzed aggregated data for over 90 million members for state data and aggregated data for about 23 million members in a top 100 most-populated U.S. city as determined by census data. All dollar amounts have been rounded to the nearest whole.