Can You Get a Discover Home Loan with a 600 Credit Score?

In today’s competitive housing market, securing a home loan can feel like an uphill battle—especially if your credit score isn’t perfect. A 600 credit score sits at the lower end of the "fair" credit range, leaving many borrowers wondering: Can I qualify for a Discover home loan with this score? The short answer is maybe, but there’s a lot more to the story.

Understanding Credit Scores and Home Loans

Before diving into Discover’s lending criteria, it’s crucial to understand how credit scores impact mortgage approvals. Credit scores range from 300 to 850, and lenders typically categorize them as follows:

• Poor (300-579) – High-risk borrowers
• Fair (580-669) – Subprime but may qualify for some loans
• Good (670-739) – Competitive rates
• Very Good (740-799) – Favorable terms
• Excellent (800-850) – Best interest rates

A 600 credit score falls into the "fair" category, meaning you may face higher interest rates or stricter requirements.

Discover Home Loans: An Overview

Discover is a well-known financial institution offering personal loans, credit cards, and student loans, but it also provides home equity loans (not traditional mortgages). If you’re looking for a purchase mortgage, Discover doesn’t currently offer them—so you’ll need to explore other lenders. However, if you’re interested in a home equity loan or cash-out refinance, Discover might be an option.

Minimum Credit Score Requirements

Discover doesn’t publicly disclose its exact minimum credit score for home equity loans, but most lenders in this space require at least 620-660. A 600 credit score could make approval difficult, but not impossible. Here’s what you can do to improve your chances:

1. Reduce Debt-to-Income (DTI) Ratio – Lenders prefer a DTI below 43%.
2. Increase Down Payment – A larger down payment reduces lender risk.
3. Show Stable Income – Consistent employment history helps.
4. Fix Credit Errors – Dispute inaccuracies on your credit report.

Alternative Loan Options for a 600 Credit Score

If Discover isn’t an option, consider these alternatives:

FHA Loans (Government-Backed)

• Minimum credit score: 580 (or 500 with 10% down)
• Lower down payment requirements (3.5%)
• More forgiving of past credit issues

VA Loans (For Veterans & Active Military)

• No minimum credit score (but lenders often require 580-620)
• 0% down payment option
• No mortgage insurance

Subprime or Non-QM Loans

• Designed for borrowers with poor or fair credit
• Higher interest rates and fees
• Shorter repayment terms

The Impact of Today’s Housing Market

The 2023-2024 housing market has been shaped by rising interest rates, inflation, and low inventory. For borrowers with a 600 credit score, this means:

• Higher mortgage rates (compared to those with excellent credit)
• Tougher approval processes as lenders tighten standards
• More competition from cash buyers and investors

How to Improve Your Chances

• Boost your credit score by paying down debt and avoiding new credit inquiries.
• Save for a larger down payment to offset risk.
• Work with a mortgage broker who specializes in low-credit borrowers.

Final Thoughts

While getting a Discover home loan with a 600 credit score is challenging, it’s not impossible—especially if you’re looking for a home equity loan rather than a traditional mortgage. If Discover isn’t an option, FHA, VA, or subprime loans may provide pathways to homeownership.

The key takeaway? Don’t give up. With strategic financial moves and persistence, you can still achieve your homeownership dreams—even with a less-than-perfect credit score.