Case Study: Buying a Home with a Middle Credit Score® of 620—Real Strategies That Worked

For many prospective homeowners, hearing that a score below 700 disqualifies them from buying a home is enough to delay their dream. But for Kevin and Monica Alvarez, a young couple living in Albuquerque, New Mexico, a Middle Credit Score® of 620 wasn’t a limitation—it was a starting point. Despite student loan debt, a modest income, and limited savings, the Alvarezes leveraged focused credit repair and smart financial decisions to qualify for a mortgage and close on their first home.

Initial Snapshot:

• Middle Credit Score® (Kevin): 622
• Middle Credit Score® (Monica): 618
• Combined income: $74,000 annually
• Student loan debt: $46,000 (combined)
• Monthly rent: $1,350
• Savings: $3,200

Facing the Truth and Forming a Plan

The couple started their homeownership journey with more doubts than confidence. They assumed they needed a 700+ credit score and $20,000 in the bank. But after attending a virtual homeownership seminar hosted by a local credit union, they learned about FHA loan flexibility and how a score as low as 580 could still lead to approval.

They reached out to a HUD-certified housing counselor who performed a full financial analysis and created a step-by-step roadmap. The Alvarezes were told they could qualify for FHA financing once their scores stabilized at 620+, provided their DTI (debt-to-income ratio) remained manageable and they had at least 3.5% down payment plus reserves.

The most surprising revelation was that their biggest barrier wasn’t their income or debt—it was misinformation. Once they understood what lenders were truly looking for, they realized their goal was not only possible, it was achievable within a single year.

Building Momentum and Staying Accountable

Kevin and Monica made a pact: every financial decision over the next year had to serve their goal of becoming homeowners. They put a whiteboard calendar in their kitchen with reminders to check balances, dispute errors, and update their score tracker. Every Sunday night became their “finance night,” where they reviewed budgets and celebrated small wins.

This accountability system helped them maintain momentum even when progress felt slow. Monica began listening to personal finance podcasts on her way to work. Kevin followed real estate influencers online who shared credit-building tips and success stories.

Strategic Steps and Credit Boosts

• Month 1–2: They pulled all three credit reports and created a spreadsheet to monitor debts, balances, and payment dates. Monica had two credit cards close to the limit and one medical collection under $500. They disputed the medical debt using template letters and followed up twice to ensure removal. Both cards were paid down to 28% utilization, and minimum payments were set to auto-pay to ensure no new late marks.
• Month 3: Kevin added Monica as an authorized user on his oldest credit card, which extended her credit history and increased her available credit. This single move led to a 23-point jump for Monica by the next reporting cycle. They also opened a joint secured credit card and used it only for Netflix, Spotify, and internet payments—automating payment in full each month.
• Month 4: Kevin’s score jumped to 634 and Monica’s to 629. They met with a loan officer who reviewed multiple FHA overlays across lenders. Some banks required two months of reserves, others four. Knowing this, they adjusted their budget to double their emergency savings goals.
• Month 5–6: To lower their DTI, Kevin paid off the final $1,100 on his car loan ahead of schedule, freeing up $240/month. Monica directed her tax refund toward savings, which brought their reserves to over $5,000. They also used a cashback promotion on their credit card to redeem $75, which they added to their “closing cost jar.”
• Month 7–8: They secured pre-approval from a local lender with 3.5% down and a $2,500 seller credit. Their housing counselor referred them to a first-time buyer program that awarded them a $5,000 down payment grant. Every Saturday became “house tour day.” They kept notes in a shared Google Sheet comparing location, square footage, and proximity to work.
• Month 9: After three rejected offers, they finally landed a deal on a 3-bedroom, 2-bath home in a quiet cul-de-sac. The seller agreed to cover closing costs, and the home passed inspection with no major repairs. Underwriting requested additional documentation of student loan deferments, which they quickly provided.
• Month 10: Final approval came. They closed on a 30-year fixed-rate FHA loan at 6.25%. With their grant and seller concessions, they brought less than $3,000 to closing. Their new mortgage payment: $1,280—$70 less than their previous rent. They moved in with the help of friends, and Kevin cooked their first meal in the new kitchen: Monica’s favorite green chile enchiladas.

Visual Timeline: Kevin & Monica Alvarez’s 10-Month Path to Homeownership

To better visualize the progress Kevin and Monica made from preparation to closing, here is a month-by-month timeline detailing the steps they took:

Final Results:

• Middle Credit Scores® rose from 622/618 to 641/638
• Closed on a $244,000 home with just under $3,000 out-of-pocket
• Received $7,500 in total assistance toward down payment and closing
• New home payment lower than rent
• Added over $10,000 in immediate equity based on appraisal

Their lender estimated that based on local appreciation trends, their home could gain another $15,000 in equity within the next 24 months. That projection inspired Kevin and Monica to set a new goal: turning their first home into a rental property within five years.

Post-Purchase Wins:

• Built a $1,000 home maintenance fund in the first 90 days post-close
• Used a $150 gift card from their credit union to buy home improvement tools
• Shifted utilities and insurance to credit to maximize cashback
• Referred three friends to their housing counselor and earned $150 in referral gift cards
• Joined a community financial literacy group that hosts monthly Zooms
• Began tracking net worth and home equity through a spreadsheet they update quarterly

Monica also began mentoring younger coworkers who felt stuck in the rent cycle. Her goal is to teach others what she and Kevin learned—that you don’t need perfection to win, you just need a plan.

Key Takeaways from Kevin & Monica’s Journey:

• You don’t need perfect credit. A 620 score opened the door with the right planning and lender.
• Every point matters. A 5-point jump at the right time expanded their loan options.
• Teamwork multiplies success. Their coordinated effort made the process less stressful and more rewarding.
• Pre-approvals aren’t all equal. Shopping for the right lender and grant made a $7,500 difference.
• Information is power. Housing counselors, podcasts, and templates gave them tools they didn’t know they needed.

Quote from Monica:

“We didn’t have perfect credit, but we had a plan—and that made all the difference. This house isn’t just a home, it’s our reward for every small step we took.”

Their journey is a clear example that credit growth is not about perfection, but persistence. With structure, support, and accountability, even a Middle Credit Score® in the low 600s can become the foundation for generational wealth.

Would you like a visual timeline added next for their journey?

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