The 30-year fixed rate has never been this low since Freddie Mac began tracking mortgage rates in 1971. It surpassed the previous low of 2.98 percent, set last month. This is the eighth time since March that the 30-year fixed rate has fallen to a new low. But this historic drop is set to rise again.. and soon.

Yes! You can Buy a Home With Bad Credit

New options make it easier to purchase the home of your dreams even if you have bad or less then perfect credit.

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Buy a House with Bad Credit

A bad credit score does not have to prevent you from owning your dream home.

Credit scores generally range from 300 at the very bottom to 850 at the top. Some scoring systems for auto loans and bank credit cards can stretch from 250 to 900. As a borrower, you want the highest possible number to get the best rates.

The credit scores of many borrowers, however, are not in the highest ranges. Figures reported last fall from FICO developer Fair Isaac show that the average score last fall reached 706, a record high. At the same time, 28.2 percent of all credit users had scores below 650. The specific population breakdown looks like this.

300-499 – 4.3%
500-549 – 6.8%
550-599 – 7.8%
600-649 – 9.3%
650-699 – 12.5%
700-749 – 16.2%
750-799 – 20.7%
800-850 – 22.3%

Figures from Experian are similar. It says about 33 percent of all Americans have FICO scores below the “good” range. Experian says the breakdown looks like this, with a scale from 300 to 850.

Exceptional – 800-850 – 21%
Very Good – 740-799 – 25%
Good – 670-739 – 21%
Fair – 580-669 – 17%
Very Poor – 300-579 – 16%

Even borrowers in the “fair” and “very poor” bands may be able to qualify for mortgage financing. As an example, in its latest annual report to Congress, the U.S. Department of Housing and Urban Development (HUD) said “the volume of mortgages with credit scores less than 620 has doubled over the last three years.” The share of loans with borrower credit scores below 620 rose from 11.21 percent in fiscal year 2018 to 12.73 percent in 2019, HUD noted.

That’s about 125,000 FHA-insured mortgages in a single year for borrowers in the “fair” and “poor” bands.