If you are looking to buy, the best thing to do is speak with a lender. They will be able to look at everything as a whole and let you know where you stand. I know some lenders ability to loan vary on credit score. However they should also be able to direct you down the right path to improve your credit if need be.
What is your objective?
If you are buying, yes, you need a FICO score of 620+ (sometimes even a 640). However, I did get a client with a 580 approved for a mortgage, but she had to put down more than 20%, prove that she had a long term job history and write a letter to the lenders.
Some lenders will have contacts with a credit repair company or have suggestions how to get your credit score up enough to qualify for a loan.
If you are renting, it depends on the owners/landlords if they will be willing to rent to you. They may ask to explain the reason for the slow or poor credit history. I have seen some owners completely deny people with foreclosures and bankruptcies, yet I have seen as long as they can pay the rent and have a stable job, owners / landlords will rent.
Otherwise.. good luck!
Nancy S Bergman
Realtor - Lyon Short Sale Certified
DRE # 01893550
Lyon RE Downtown
2801 J Street
Sacramento, CA 95816
Ms. Roe is only slightly off. You can get an FHA loan with 580 scores (actually lower than that but the down payment is 10%). With 580 scores, in most cases, the down payment of 3.5% must be yours. Get to 620 and it can be a gift. Many of the larger banks increased their credit requirement to 640 because they can. Smaller companies still offer lower scores because they have to.
Aside from the score, you must have 12 months of on time rental payments and 2 credit cards, each 1 year old and reporting within the last 12 months as open and paid on time. No collections allowed over $1000. Again, my private money people don't care about your credit. They care that you can pay rent on time and can pay the mortgage. The rate starts at 9.5% (lower than the rates were during subprime days). The investor does charge processing fees up front and fees at closing. The fees at closing can be financed. If you find property at 67% of its value, you are not required to put money down. Please visit my website for additional information.
If you are buying in Texas (GO COWBOYS!), speak to a lender there. If your poor credit is the result of late pays and charge offs, that's worse than if your score is low because you've never established much credit, than that's different. If you speak with a lender, a good one will work with you to fix the poor credit so you can get a loan. It's a process requiring some time, but better to get started than to wait.