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Best Mortgage Lenders of 2018 for Low or Bad Credit Score Borrowers

Finding the Right Mortgage, Mortgages
NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. Here’s how we make money.
We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.
NerdWallet offers financial tools and advice to help you understand your options and make the best possible decisions. The guidance we offer and information we provide are deeply researched, objective and independent. We spent over 400 hours reviewing the top mortgage lenders before selecting the best for our readers.

Your credit score tells lenders how likely you are to pay back the money you borrow. A high score sends all the right signals, while a low credit score, sometimes referred to as “bad credit,” can keep you from getting approved.

The credit score needed for a mortgage depends on the type of loan. Government-backed loan programs — FHA, VA and USDA — generally have lower credit-score requirements than conventional mortgages. But it’s the lender that ultimately decides what the minimum credit score will be for each loan product.

If your credit score is at or near lenders’ minimum, they could demand a bigger down payment, charge a higher interest rate or require you to pay more fees. In short, you could end up paying more for your home loan. The best way to avoid these penalties is to elevate your credit score before you apply.

» MORE: Start working on your credit score

If you have less-than-ideal credit, you’ll need a lender that’s equipped to handle it. NerdWallet has picked some of the best mortgage lenders for borrowers with low credit scores so you can quickly decide which one is right for you.

Best overall mortgage lenders for borrowers with low or bad credit

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at Carrington

Min. credit score

580/ 550 for FHA 30-year

Min. down payment

3%

Why we like it

Ideal for borrowers seeking a government-backed loan. About 95% of the mortgages Carrington makes are FHA, VA or USDA. About 45% of Carrington borrowers have FICO scores under 650.

 

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at New American

Min. credit score

580

Min. down payment

3%

Why we like it

Ideal for borrowers who don't have a strong credit history. New American Funding will use manual underwriting to evaluate borrowers, allowing flexibility for borrowers with low credit scores.

 

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at Rocket Mortgage

Min. credit score

580

Min. down payment

3%

Why we like it

Ideal for borrowers who prefer an online experience. Rocket Mortgage offers lower credit score mortgage programs from FHA, VA and USDA.

 

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at JG Wentworth

Min. credit score

580

Min. down payment

3%

Why we like it

Ideal for those seeking a fast and automated way to get a loan. JG Wentworth offers FHA, VA and USDA home loans, as well as Fannie Mae HomePath and Freddie Mac Home Possible mortgages for moderate-income home buyers.

 

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at Quicken Loans

Min. credit score

580

Min. down payment

3%

Why we like it

Ideal for borrowers who want a no-hassle process. Quicken Loans gives you a prelimary loan decision in just minutes. If you aren't initially approved, mortgage loan experts can let you know what you need to do to qualify.

 

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at Network Capital

Min. Credit Score

600

Min. down payment

5%

Why we like it

Ideal for mortgage borrowers who need strong customer support. NetWork Capital has no lender fees, comprehensive customer support and a broad loan selection, including FHA, VA and USDA.

 

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at HomeBridge

National / regional

National

Min. down payment

5%

Why we like it

Ideal for borrowers who wanted to be treated like an MVP. HomeBridge offers government-backed loans to borrowers with a minimum 550 credit score.

 

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at Connexus

National / regional

National

Min. down payment

3%

Why we like it

Ideal for borrowers who need the mortgage lender to evaluate alternative credit data. Connexus offers conventional loans, but not FHA or VA mortgages.

 

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at NerdWallet

National / regional

National

Min. down payment

3%

Why we like it

Ideal for borrowers who prefer a traditional lender. In addition to low down payment options, CitiMortgage's OWN program has flexible credit guidelines for borrowers who may have low credit scores.

 

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at Navy Federal

National / regional

National

Min. down payment

0%

Why we like it

Ideal for military veterans and their families. Navy Federal Credit Union underwriting goes well beyond FICO scores, looking at rent, utility and credit card payments, as well as military service.

Summary: best mortgage lenders for borrowers with low or bad credit scores

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NerdWallet’s selection of mortgage lenders for inclusion here was made based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.