# Can You Buy a House in El Paso With Bad Credit? > Can you buy a house in El Paso with bad credit? Often yes. Minimum scores by loan type, what a low score really costs you, and the fastest ways to raise it. **Author:** Marina Ramirez **Published:** 2026-09-11 **Category:** Buyer's Guide --- Yes, you can buy a house in El Paso with bad credit, and more people do it than you would guess. Federal Housing Administration loans generally start at a 580 score with three and a half percent down, some lenders go to 500 with ten percent down, and loans from the Department of Veterans Affairs have no published minimum at all, though most lenders set their own around 580 to 620. The harder question is not whether you can. It is what it costs you, and whether waiting six months would put you in a materially better position. That answer is different for everybody, so let me give you the numbers instead of encouragement. ## Minimum Credit Scores by Loan Type **Federal Housing Administration loan.** The program allows 580 with three and a half percent down, or 500 to 579 with ten percent down. In practice most El Paso lenders overlay their own minimum, commonly 580 or 620. Ask a lender what their overlay is before you assume you are excluded. **Veterans Affairs loan.** The Department of Veterans Affairs sets no minimum score. Lenders do. Most want 580 to 620. This is the best option available if you qualify, since it also means zero down and no monthly mortgage insurance. **United States Department of Agriculture loan.** Typically 640. Parts of the far east valley and outlying areas around El Paso County qualify geographically, which surprises people. **Conventional loan.** Generally 620 minimum, and pricing gets meaningfully better at 680, 700, and 740. If you are somewhere in the 500s, the Federal Housing Administration path is usually the realistic one. If you have military service, start with the Veterans Affairs option regardless of score. ## What a Low Score Actually Costs This is the part that gets skipped, and it is the part that matters. Take a $250,000 purchase. The difference between a 620 score and a 740 score can easily be three quarters of a percentage point on your rate. On a 30 year loan, that is roughly $120 to $150 per month, which is around $45,000 over the life of the loan. On a Federal Housing Administration loan there is a second cost. The annual mortgage insurance premium stays for the life of the loan if you put down less than ten percent. That is typically another $150 or so per month on a $250,000 loan, and unlike private mortgage insurance on a conventional loan, it does not fall off when you reach twenty percent equity. You have to refinance to remove it. So a buyer at 580 versus a buyer at 700 on the same house can be paying $250 to $300 more per month for the same four walls. Over five years that is real money. None of that means you should not buy. It means you should know what you are choosing. ## When Buying Now Makes Sense Anyway **You are paying rent that is close to the payment.** If your rent is $1,600 and the payment on a house you would actually want is $1,850, the gap is smaller than the cost of waiting a year in a market that historically appreciates. **You have military orders.** If you are here for three or four years and the alternative is renting the whole time, the math often favors buying even at a worse rate, because you can refinance later but you cannot get those rent payments back. **Your score is low from thin credit, not from damage.** A 590 caused by having only one card for eighteen months is very different from a 590 caused by a recent collection. The first will fix itself with time, but it also is not hiding anything from an underwriter. **Rates are expected to move against you.** Nobody knows this reliably. Be careful with anyone who tells you they do. ## When Waiting Is the Better Call **You have collections or charge offs you can settle.** Paying off a collection can move a score noticeably, and lenders often require it anyway. **You are within 30 to 60 points of a pricing tier.** The tiers that matter are 620, 660, 680, 700, and 740. Moving from 695 to 700 is worth more than moving from 640 to 660. Ask a lender to run your pricing at your score and at the next tier up so you can see the actual dollar difference. **Your debt to income ratio is the real problem.** Sometimes the score is fine and the ratio is what fails. Paying down a car loan may help more than anything you do to your credit report. **You have no reserves.** Buying with a thin cushion is how people end up in trouble when the water heater goes at month four. ## The Fastest Ways to Raise a Score These are ordered by how quickly they move the number. 1. **Pay down revolving balances below 30 percent of the limit, ideally under 10 percent.** Utilization is the single fastest lever. This can show up within one billing cycle. 2. **Do not close old cards.** Length of history matters, and closing a card also shrinks your available credit, which raises utilization. 3. **Dispute genuine errors.** Pull all three reports free at annualcreditreport.com. Errors are common. Fixing a misreported late payment can move a score quickly. 4. **Ask for a goodwill removal on a single old late payment.** It works more often than people expect, particularly with a long standing account and one slip. 5. **Become an authorized user** on a family member's old, well managed card. The account history can help. 6. **Stop opening new accounts.** Every inquiry and new account trims the score in the short term, and underwriters will ask about anything new during the process. What does not work: paying someone to "repair" your credit by disputing accurate items, and any advice involving a new social security number. Those cost money and can cost you the loan. I go deeper into scoring mechanics in the [credit score and home buying guide](/en/blog/credit-score-home-buying-el-paso-2026), and the disqualification list in [what disqualifies a first time home buyer in Texas](/en/blog/what-disqualifies-first-time-home-buyer-texas). ## Down Payment Help Still Applies A lower score does not remove you from assistance programs. El Paso has several down payment assistance options, and Texas has statewide programs through the Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corporation. Most require a minimum score in the 620 to 640 range, which is one more reason to get to 620 rather than to stop at 580. The [down payment assistance guide](/en/blog/down-payment-assistance-el-paso-2026) lists what is available locally, and the [Mi Casa grant explainer](/en/blog/how-does-mi-casa-grant-work-el-paso) covers the city program specifically. ## Frequently Asked Questions ### What is the minimum credit score to buy a house in Texas? There is no state minimum. Federal Housing Administration loans allow 580 with three and a half percent down, or 500 with ten percent down. Conventional loans generally start at 620. Most Veterans Affairs lenders want 580 to 620 even though the Department itself sets no minimum. ### Can I buy a house with a 580 credit score? Usually yes, through a Federal Housing Administration loan with three and a half percent down, as long as your income, debt ratio, and payment history support it. Expect a higher rate and mortgage insurance that stays for the life of the loan. ### Can I get a VA loan with bad credit? The Department of Veterans Affairs does not set a minimum score, but individual lenders do, usually 580 to 620. Lenders vary more than people realize, so if one declines you, ask another. ### How long does it take to fix credit before buying? Utilization changes can show up in 30 to 60 days. Settling collections and rebuilding after a serious delinquency takes six months to two years. A bankruptcy discharge typically requires two years for a Federal Housing Administration loan and four for conventional. ### Will a lender pull my credit again before closing? Yes, usually right before funding. Do not open credit cards, finance furniture, or buy a car between contract and closing. This ends deals in El Paso every month. ### Is it better to wait for a higher score or buy now? It depends on the gap. Moving up one pricing tier can save $100 or more per month, which is worth waiting a few months for. Waiting a year to gain ten points usually is not. Have a lender price your loan at both scores and decide from the numbers. ## The Bottom Line Bad credit is a cost, not a wall. Federal Housing Administration and Veterans Affairs loans exist precisely so that people without perfect files can own homes, and El Paso prices make that reachable at more income levels than most Texas cities. If you want to know exactly where you stand, and whether three months of work would change your payment enough to be worth it, [send me a message](/en#contact). I will connect you with a lender who will run both scenarios rather than just tell you no. --- ## Contact Marina Ramirez, REALTOR® — Clear View Realty (El Paso, TX) - Phone: (915) 240-8340 - Email: info@marina-ramirez.com - Website: https://marina-ramirez.com/en Human-readable version of this page: https://marina-ramirez.com/en/blog/buy-house-el-paso-bad-credit