Quick answer
You need at least a 580 credit score for an FHA loan with 3.5% down (500 with 10% down), and 620 for a conventional loan. VA loans have no official minimum but most lenders want 620+. A score of 740 or higher gets the best mortgage rates.
TL;DR
- FHA loans: Minimum 580 (3.5% down) or 500 (10% down)
- Conventional loans: Minimum 620, but 740+ gets the best rates
- VA loans: No official minimum, but most lenders want 620+
- A 100-point difference in credit score can cost you $40,000+ in extra interest over 30 years
Minimum Credit Scores by Mortgage Type
| Loan Type | Minimum Score | Down Payment | Best For |
|---|---|---|---|
| Conventional | 620 | 3–20% | Good credit, PMI avoidance at 20% |
| FHA | 580 (3.5% down) | 3.5–10% | Lower credit, first-time buyers |
| FHA (low score) | 500 | 10% | Poor credit, willing to put 10% down |
| VA | No official min | 0% | Veterans and active military |
| USDA | 640 | 0% | Rural areas, moderate income |
| Jumbo | 700–720 | 10–20% | Homes above conforming loan limits |
How Credit Score Affects Your Interest Rate
Your credit score doesn't just determine if you get approved — it dramatically affects your interest rate. Here's what a $350,000, 30-year fixed mortgage looks like at different scores:
| Credit Score | Estimated Rate | Monthly Payment | Total Interest (30yr) |
|---|---|---|---|
| 760+ | 6.0% | $2,098 | $405,280 |
| 700–759 | 6.25% | $2,155 | $425,800 |
| 680–699 | 6.5% | $2,212 | $446,320 |
| 660–679 | 6.75% | $2,270 | $467,200 |
| 620–659 | 7.25% | $2,388 | $509,680 |
| 580–619 (FHA) | 7.5%+ | $2,447 | $530,920 |
The difference between a 760 score and a 620 score is $290/month and over $104,000 in total interest. That's like buying a second car with the extra interest alone.
How to Improve Your Score Before Buying
If your score isn't where you need it, here's how to boost it before applying for a mortgage. Many of these tips can raise your score 50–100 points in 3–6 months:
- Pay down credit card balances. Get utilization below 30%, ideally below 10%. This is the fastest lever — can boost your score 20–50 points in one billing cycle.
- Don't miss any payments. Set up autopay for everything. Even one missed payment can drop your score 60+ points.
- Dispute errors on your credit report. Check all three bureaus at AnnualCreditReport.com. Read our complete credit score guide for more details.
- Don't open new accounts. Each hard inquiry drops your score 5–10 points. Avoid new credit cards or loans for 6+ months before applying.
- Keep old accounts open. Length of credit history matters. Don't close old cards.
When to Start Preparing
Ideally, start working on your credit score 6–12 months before you plan to buy. This gives you time to pay down balances, dispute errors, and let any recent hard inquiries age off your report. Most negative items have less impact after 12 months.
Where to Go From Here
While you can buy a house with a 580 credit score, you'll pay significantly more over the life of the loan. Investing 3–6 months in credit improvement before buying can save you tens of thousands of dollars. Use our Rent vs Buy Calculator to see how different scenarios affect your total costs, and check your Financial Health Score for a complete financial readiness assessment.
Frequently Asked Questions
How much does credit score affect mortgage rates?
A lot. A 100-point difference in score can change your rate enough to cost $40,000 or more in extra interest over a 30-year loan.
How fast can I raise my credit score before buying a house?
Paying down credit card balances, disputing errors and avoiding new credit can raise many scores 50–100 points in 3–6 months.
When should I start working on my credit before buying?
Ideally 6–12 months before you plan to apply for a mortgage.
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Disclaimer: This article is for educational purposes only and is not financial, tax, or legal advice. Figures are estimates based on publicly available data at the time of writing. Consult a qualified professional about your situation.