A credit score at the lower end of the range can make it difficult to get a mortgage at today’s competitive interest rates—or to qualify for a mortgage at all. But there are several ways you can help improve your chances of qualifying for a mortgage at the best rates, including building a stronger credit history before buying a new home and focusing on non-traditional mortgage options.

How you may be able to buy a home with bad credit

First, you need to know what information is in your credit report and how it’s impacting your credit score.

“A lot of times, people have no idea why their credit score is so low,” says Myra Boggs, a housing counselor at Working in Neighborhoods Cincinnati, a Department of Housing and Urban Development (HUD)-Certified Housing Counseling Agency. Boggs says an in-depth credit review is vital to figure out where you stand.

“About 50 percent of the people that come in have a credit score of 560, and many don’t really know what that means,” Boggs says.

The Equifax formula, based on the FICO credit-scoring model, breaks down as follows:

Poor: 280-559
Fair: 560-659
Good: 660-724
Very Good: 725-759
Excellent: 760-850

Start by reviewing your credit report thoroughly. You should make a list of your unpaid debts and ensure that all the information that appears on your credit report is correct. Each year, you can pull a free copy of your credit report from each of the three credit reporting agencies (CRAs) through AnnualCreditReport.com. You can also purchase a copy of your credit report and your credit score through one of the CRAs directly.

Before buying a home, Boggs recommends that you develop a budget, practice responsible credit behavior, and add money to savings.

“My goal is always to get people to save $2,500 before they start applying for a mortgage,” Boggs says.

Explore your loan options

According to Boggs, if you have a lower credit score, you may be able to qualify for a government loan, which is a mortgage insured by the Federal Housing Administration (FHA). In order to apply for an FHA loan, you will have to work with an FHA-approved lender who may have additional qualification requirements.

The benefit of an FHA loan is a lower down payment—usually about 3.5 percent of the purchase price of the home. Some FHA loans also allow sellers and lenders to pay some of the borrower’s closing costs, which can lower the overall cost of the home. However, the lender might tack on a higher interest rate for this service. Bear in mind that not all FHA lenders offer the same terms and interest rates, so it’s important to shop around.

FHA loans also carry some disadvantages, such as required insurance payments. Borrowers must pay an up-front premium, usually due when they get the loan, as well as an annual premium, which is paid monthly.

“That insurance can add up to $500 or $600 a month, which can be a real hardship for a new homeowner,” Boggs says.

If you are a veteran or an active military member, you may be able to qualify for one of the loans guaranteed by the U.S. Department of Veteran’s Affairs. VA loans typically do not require a down payment or mortgage insurance, but there may be some additional fees attached.

Other ways you may be able to qualify for a mortgage

Make a larger down payment. The more money you are able to put down, the more equity you will have in the house and the less risk the lender will be taking in extending you a mortgage. A lender may look more favorably on your application if you can make a down payment that is larger than the FHA requirement of 3.5 percent of the sale price. Many local and state housing agencies offer down payment assistance to help homebuyers afford a mortgage.

Pick a specific lender. Some lenders may be more flexible than others. For example, if you are a member of a credit union or a small bank, you may be eligible for a specific mortgage program or product if you can prove you have a stable income and demonstrate your history of on-time rent payments. Many national banks also offer special payment programs, Boggs says.

Work with a housing counselor. HUD offers counseling resources to consumers who want to buy a home or are struggling to make their mortgage payments.

“For those who have really low credit scores, I meet with them every six to eight weeks to help them stay on track with their budget and increase their savings,” Boggs says. Housing counseling agencies can also help refer you to lenders with special loan assistance programs.

If you have a low credit score, working toward homeownership may be a long process. But, says Boggs, “if you are serious and ready to put in the hard work, it’s not impossible.”