What Credit Score Do You Need for a Mortgage?

What Credit Score Do You Need for a Mortgage?

The minimum credit score you need for a mortgage depends on the loan type. For a conventional loan, most lenders require a 620 FICO score. FHA loans allow scores as low as 500 with a 10% down payment, or 580 with the standard 3.5% down payment. VA loans have no government-mandated minimum, though most lenders set an internal floor around 580 to 620. Understanding these thresholds is the first step toward qualifying for the right mortgage — and your credit score also directly impacts the interest rate you receive, potentially saving or costing you tens of thousands of dollars over the life of the loan.

According to the Federal Reserve Bank of New York, the median credit score for new mortgage originations was 770 in Q3 2025. However, that does not mean you need a 770 to buy a home. Millions of borrowers successfully obtain mortgages each year with scores in the 620 to 700 range. The key is matching your credit profile to the right loan program.

Credit Score Minimums by Loan Type

Conventional Loans

Conventional loans backed by Fannie Mae and Freddie Mac generally require a minimum 620 credit score. However, a 620 score will result in higher interest rates and may require private mortgage insurance (PMI) if your down payment is below 20%. Borrowers with scores above 740 typically qualify for the best conventional rates.

Fannie Mae uses a risk-based pricing model called Loan-Level Price Adjustments (LLPAs). These adjustments add or subtract from your base rate depending on your credit score and loan-to-value ratio. For example, a borrower with a 660 score and 5% down payment could pay 1.5 to 2.75 percentage points more in fees compared to a borrower with a 760 score and the same down payment. Those fees translate directly into a higher interest rate.

For a detailed comparison between conventional and government-backed options, see our guide on FHA loans explained.

FHA Loans

FHA loans insured by the Federal Housing Administration are designed for borrowers with lower credit scores and smaller down payments. The minimums are:

• 580 or higher: Qualifies for 3.5% down payment
• 500 to 579: Qualifies with 10% down payment
• Below 500: Not eligible for FHA financing

FHA loans are particularly popular among first-time home buyers because of their flexible qualification standards. According to the Consumer Financial Protection Bureau (CFPB), FHA loans accounted for approximately 15% of all purchase mortgages in 2025.

VA Loans

The Department of Veterans Affairs does not set a minimum credit score for VA home loans. However, individual lenders establish their own requirements, typically between 580 and 640. VA loans offer significant benefits including zero down payment, no PMI, and competitive interest rates. Veterans and active-duty service members with credit challenges should compare multiple VA-approved lenders through DirectLender.com, as minimum score requirements vary significantly from lender to lender.

USDA Loans

USDA loans require a 640 credit score for automatic underwriting approval through the GUS (Guaranteed Underwriting System). Borrowers with scores below 640 may still qualify through manual underwriting, but the process takes longer and requires stronger compensating factors such as low debt ratios, significant savings, or stable employment history.

Jumbo Loans

Jumbo loans exceed conforming loan limits and typically require credit scores of 700 or higher. Because these loans cannot be sold to Fannie Mae or Freddie Mac, lenders assume more risk and set stricter requirements. Some jumbo lenders require scores of 720 or even 740, especially for loan amounts above $1.5 million.

How Your Credit Score Affects Your Mortgage Rate

Your credit score does not just determine whether you qualify — it directly impacts the rate you pay. According to data from Freddie Mac, the difference between a 620 and a 760 credit score can mean 0.5% to 1.5% higher interest rate. On a $350,000 30-year fixed mortgage, that translates to $100 to $300 more per month and $36,000 to $108,000 more in total interest over the life of the loan.

Here is how credit score ranges generally correlate with mortgage pricing:

• 760 and above: Best available rates, lowest fees
• 720 to 759: Slightly above best rates, minimal fee impact
• 680 to 719: Moderate rate increase, noticeable fee adjustments
• 640 to 679: Significant rate increase, higher fees
• 620 to 639: Highest rates for conventional; consider FHA as an alternative

Understanding how rates work is essential to making a smart mortgage decision. Our guide on understanding mortgage rates breaks down all the factors that influence your rate beyond credit score.

Which Credit Score Do Lenders Use?

When you apply for a mortgage, lenders pull your credit reports from all three bureaus — Equifax, Experian, and TransUnion. Each bureau produces a FICO score, and lenders use the middle score. If you are applying with a co-borrower, lenders use the lower of the two applicants' middle scores.

Mortgage lenders use specific FICO score versions:

• Equifax: FICO Score 5
• Experian: FICO Score 2
• TransUnion: FICO Score 4

These older FICO versions may differ from the score you see on credit monitoring apps, which typically display FICO Score 8 or VantageScore 3.0. It is common for your mortgage FICO score to be 20 to 40 points different from the score shown on consumer apps. This is why getting pre-approved with actual lenders is important — it shows you the exact score they will use to price your loan.

How to Check Your Credit Before Applying

Before applying for a mortgage, take these steps:

Pull Your Free Credit Reports

Visit AnnualCreditReport.com to access your free credit reports from all three bureaus. Review each report for errors, outdated accounts, or fraudulent activity. According to the Federal Trade Commission, roughly one in five consumers has an error on at least one credit report, and these errors can lower your score.

Dispute Errors Immediately

If you find inaccuracies, file disputes directly with the credit bureaus. Common errors include accounts that do not belong to you, incorrect balances, duplicate accounts, and closed accounts reported as open. Correcting errors can boost your score by 20 to 100 points depending on the severity of the mistake.

Understand Your Debt-to-Income Ratio

Your credit score works alongside your debt-to-income ratio to determine qualification. Even with a high credit score, excessive debt relative to income can prevent approval. Most conventional lenders cap DTI at 45%, while FHA allows up to 50% with compensating factors.

Tips to Improve Your Credit Score Before Applying

If your credit score is below the threshold for your target loan type, consider these strategies:

Pay Down Credit Card Balances

Credit utilization — the percentage of available credit you are using — accounts for roughly 30% of your FICO score. Reducing your utilization below 30% can produce a noticeable score increase within one to two billing cycles. For the biggest impact, aim for utilization below 10%.

Avoid Opening New Accounts

Each new credit application triggers a hard inquiry that temporarily lowers your score by 5 to 10 points. In the months leading up to a mortgage application, avoid opening new credit cards, auto loans, or other credit accounts.

Keep Old Accounts Open

Length of credit history accounts for 15% of your FICO score. Closing your oldest credit card shortens your average account age and can lower your score. Even if you do not use an old card regularly, keep it open and active with a small recurring charge.

Make Every Payment on Time

Payment history is the largest factor in your FICO score at 35%. A single 30-day late payment can drop your score by 60 to 100 points. Set up autopay for at least the minimum payment on every account to ensure you never miss a due date.

Consider a Rapid Rescore

If you are working with a lender and your score is just below a threshold, ask about rapid rescoring. This is a process where the lender submits proof of a paid-down balance or corrected error to the credit bureau and receives an updated score within days rather than waiting for the next reporting cycle.

Can You Get a Mortgage With Bad Credit?

Yes, but your options are more limited and more expensive. Borrowers with scores between 500 and 619 can qualify for FHA loans with a larger down payment. Below 500, traditional mortgage options are essentially unavailable.

For borrowers with scores below conventional or FHA minimums, alternative options include:

• Non-QM loans: Some lenders offer mortgages with alternative qualification methods, such as bank statement programs for self-employed borrowers. These may accept lower credit scores but charge higher rates.
• Credit repair and waiting: Sometimes the best strategy is to spend 6 to 12 months improving your credit before applying. A higher score means a lower rate, and the savings over 30 years often far outweigh the cost of waiting.
• Down payment assistance: Many down payment assistance programs are available for borrowers with moderate credit scores, helping offset the higher costs associated with lower scores.

Compare Lenders to Find the Best Rate for Your Score

Different lenders price risk differently. A borrower with a 660 credit score might receive rate quotes ranging from 6.5% to 7.5% depending on the lender. This is why comparing multiple offers through DirectLender.com is essential. Our marketplace connects you with direct lenders who compete for your business, ensuring you find the best rate available for your specific credit profile.

The CFPB recommends getting at least three to five rate quotes when shopping for a mortgage. Multiple mortgage inquiries within a 45-day window count as a single inquiry on your credit report, so shopping around does not hurt your score.