Your credit score is the single most influential number in the mortgage process. It determines whether you qualify, what interest rate you receive, and how much you pay over the life of the loan. The Consumer Financial Protection Bureau reports that a higher credit score at closing translates directly into a lower monthly payment — and the gap is larger than most first-time buyers expect.
This guide covers the minimum scores by loan type, what each score tier costs you in real dollars, and the fastest strategies to raise your score before applying. All figures are verified against primary sources per our research methodology.
In This Article
- What Are the Minimum Credit Score Requirements by Loan Type?
- How Much Does Your Credit Score Actually Cost You on a Mortgage?
- How Far in Advance Should You Start Preparing Your Credit?
- What Are the Fastest Ways to Raise Your Score Before Applying?
- Which Credit Score Do Mortgage Lenders Actually Use?
What Are the Minimum Credit Score Requirements by Loan Type?
The minimum varies by loan program, and “minimum” does not mean “competitive.” Meeting the floor gets you approved. Exceeding it gets you a rate that does not cost tens of thousands extra over the loan term.
| Loan Type | Minimum FICO Score | Down Payment Required | Who Backs It |
|---|---|---|---|
| Conventional | 620 | 3-20% | Fannie Mae / Freddie Mac |
| FHA | 580 (3.5% down) or 500 (10% down) | 3.5-10% | Federal Housing Administration |
| VA | No official minimum (most lenders require 620) | 0% | Department of Veterans Affairs |
| USDA | 640 (most lenders) | 0% | U.S. Department of Agriculture |
| Jumbo | 700-720 | 10-20% | Individual lender |
The U.S. Department of Housing and Urban Development sets the FHA minimums. Fannie Mae and Freddie Mac set conventional loan guidelines. Individual lenders may impose higher minimums — called “overlays” — on top of the program requirements. When I last checked, most lenders required at least 620 even for VA loans that technically have no minimum.
How Much Does Your Credit Score Actually Cost You on a Mortgage?
On a $350,000 30-year fixed mortgage, the difference between a 620 FICO Score and a 740 FICO Score is roughly $300 to $400 per month — and over $100,000 in total interest over the life of the loan. This is not theoretical. It is the direct result of risk-based pricing that every major lender uses.
| FICO Score Range | Estimated 30-Year Rate | Monthly Payment ($350k) | Total Interest Paid |
|---|---|---|---|
| 760+ | 6.5% | $2,212 | $446,300 |
| 740-759 | 6.7% | $2,261 | $463,800 |
| 700-739 | 6.9% | $2,310 | $481,600 |
| 680-699 | 7.1% | $2,360 | $499,700 |
| 660-679 | 7.4% | $2,436 | $526,900 |
| 620-639 | 8.0% | $2,568 | $574,400 |
The rates above are approximate and reflect prevailing market conditions when I last checked. Your actual rate depends on the lender, your down payment, your debt-to-income ratio, and market conditions at the time of your rate lock. The Federal Reserve’s H.15 release tracks current mortgage rate benchmarks.
Look at the total interest column. The borrower with a 620 score pays $128,100 more over 30 years than the borrower with a 760 score — on the same house, the same loan amount, the same term. That gap buys a second car, funds a child’s college education, or fully stocks a retirement account.
How Far in Advance Should You Start Preparing Your Credit?
Start improving your credit at least 12 months before you plan to apply for a mortgage. Most score-boosting actions take three to six months to fully reflect in your FICO Score. Starting early gives you multiple reporting cycles to build history and correct problems.
Pull your reports from all three bureaus through AnnualCreditReport.com immediately. Review every account for errors, incorrect balances, and accounts that should not be there. If you find mistakes, dispute them immediately — the bureaus must investigate within 30 days, and corrections on a thin file produce the largest score jumps.
My opinion: 12 months is the minimum preparation window. 18 months is better. The borrower who starts early has time to pay down credit card balances, let hard inquiries age, and build additional payment history. The borrower who starts three months out is stuck with whatever score they have. A $300 monthly payment difference over 30 years is worth 18 months of discipline.
What Are the Fastest Ways to Raise Your Score Before Applying?
Three actions produce the largest score improvements in the shortest time: paying down credit card balances, becoming an authorized user on a family member’s established card, and correcting errors on your credit report.
Pay down credit card balances: Reducing utilization from 50% to under 10% can boost a FICO Score by 30 to 50 points within one to two billing cycles. This is the single fastest legal way to improve your score. If you owe $5,000 across cards with $10,000 in combined limits, paying down to $500 drops utilization from 50% to 5%.
Authorized user accounts: Being added to a family member’s old, low-utilization card improves your average account age and available credit. The credit score factors guide explains how account age and credit mix interact with your overall profile.
Error disputes: The FTC found that one in five consumers had errors on at least one report. Removing an incorrect collection account or correcting a wrong balance can produce an immediate score increase once the bureau updates your file.
Avoid opening any new credit accounts in the six months before your mortgage application. Every hard inquiry temporarily lowers your score, and new accounts reduce your average account age. The mortgage lender will see both the inquiries and the new accounts during underwriting.
Which Credit Score Do Mortgage Lenders Actually Use?
Most mortgage lenders use FICO Score 2 (Experian), FICO Score 5 (Equifax), and FICO Score 4 (TransUnion). These are older versions of the FICO model specifically used for mortgage lending. The score you see on Credit Karma, your bank’s app, or most free monitoring tools is typically a VantageScore or a newer FICO version — and it will differ from your mortgage-specific score.
Lenders pull all three bureau scores and use the middle one. If your three scores are 680, 710, and 720, the lender uses 710. If two borrowers are on the application, the lender uses the lower of the two middle scores. This is why both applicants need to prepare their credit before applying.
You can purchase your actual mortgage FICO Scores through myFICO.com for roughly $40 per report. In my assessment, this is worth the money three to six months before applying so you know exactly where you stand and which bureau needs the most work. Do not assume your free VantageScore matches your mortgage FICO — they routinely differ by 20 to 40 points.
This guide follows the research standards outlined in our methodology page.
