Key Takeaways
- FHA loans allow credit scores as low as 500 with 10% down, or 580 with just 3.5% down
- Conventional loans typically require a minimum 620 credit score, though Fannie Mae eliminated its official minimum in late 2025
- VA loans have no official minimum, but most lenders require 620 or higher
- A 760+ credit score gets you the best mortgage rates and could save you $70,000+ over a 30-year loan
- Your credit score isn’t everything — lenders also evaluate your debt-to-income ratio, down payment, and employment history
- New credit scoring models (VantageScore 4.0 and FICO 10T) now consider rent and utility payments, helping more buyers qualify
Table of Contents
- Minimum Credit Score Requirements by Loan Type
- Understanding Credit Score Ranges
- How Your Credit Score Affects Your Mortgage Rate
- The Real Cost of a Low Credit Score
- Credit Score Changes for 2026
- Other Factors Lenders Consider
- How to Improve Your Credit Score Before Buying
- Should You Wait to Improve Your Score?
- Frequently Asked Questions
If you’re planning to buy a house, one of the first questions you’ll face is whether your credit score is good enough to qualify for a mortgage. The answer depends on the type of loan you’re pursuing and how much you want to pay in interest over the life of your loan.
The good news is that you don’t need perfect credit to become a homeowner. With government-backed loan programs, you can qualify with a credit score as low as 500. However, a higher score will unlock better rates, lower monthly payments, and potentially save you tens of thousands of dollars.
Let’s break down exactly what credit score you need to buy a house in 2026 and how different scores affect your mortgage options.
Minimum Credit Score Requirements by Loan Type
Different mortgage programs have different credit requirements. Here’s what you need to know about each option:
FHA Loans
FHA loans are backed by the Federal Housing Administration and are designed for borrowers with less-than-perfect credit. They’re one of the most accessible paths to homeownership:
- 500-579 credit score: You can qualify with a 10% down payment
- 580+ credit score: You can qualify with just 3.5% down
Keep in mind that while HUD sets these minimums, individual lenders often require higher scores — typically 580 to 620 — to reduce their risk. FHA loans also require mortgage insurance premiums (MIP) for the life of the loan in most cases.
Conventional Loans
Conventional loans aren’t backed by the government, which traditionally meant stricter requirements. Most lenders require a minimum credit score of 620 to 640 for conventional financing.
However, Fannie Mae eliminated its official minimum credit score requirement in November 2025, shifting focus to a more holistic view of creditworthiness. That said, individual lenders still set their own minimums, and 620 remains the practical floor for most conventional mortgages.
VA Loans
VA loans are available to eligible veterans, active-duty service members, and surviving spouses. The Department of Veterans Affairs doesn’t set a minimum credit score, making VA loans one of the most flexible options available.
However, since VA loans are issued by private lenders, most require a credit score of at least 620. Some lenders may approve scores as low as 580, but you’ll want to shop around.
USDA Loans
USDA loans help low-to-moderate income buyers purchase homes in eligible rural and suburban areas with no down payment required. While the USDA doesn’t mandate a minimum credit score, most lenders require:
- 640+ credit score: For streamlined processing through the automated underwriting system
- 580-639 credit score: May qualify with manual underwriting (more documentation required)
Jumbo Loans
Jumbo loans exceed the conforming loan limits ($766,550 in most areas for 2026) and carry higher risk for lenders. As a result, credit requirements are stricter:
- Minimum 700 credit score (many lenders require 720+)
- Larger down payments (typically 10-20%)
- Lower debt-to-income ratios
Understanding Credit Score Ranges
Credit scores range from 300 to 850, with higher scores indicating lower risk to lenders. Here’s how the FICO scoring model categorizes different ranges:
- Poor (300-579): Limited options with higher rates; FHA may be your only path with a larger down payment
- Fair (580-669): You’ll qualify for FHA and possibly conventional loans, but expect higher interest rates
- Good (670-739): Solid options available; you’ll qualify for most loan types with competitive rates
- Very Good (740-799): Access to favorable rates and terms across all loan programs
- Exceptional (800-850): The best rates available, though benefits level off around 760-780
According to data from Experian, the median FICO score for home buyers using purchase loans reached a record high of 768 in mid-2025. This doesn’t mean you need that score to buy — it reflects that higher home prices and rates have priced out some lower-credit borrowers.
How Your Credit Score Affects Your Mortgage Rate
Your credit score doesn’t just determine whether you qualify for a mortgage — it significantly impacts your interest rate. Lenders use credit scores to assess risk, and higher-risk borrowers pay higher rates.
Here’s how mortgage rates typically vary by credit score tier in January 2026, based on data from Curinos LLC for a $350,000 mortgage:
- 760-850: ~6.25% APR
- 700-759: ~6.47% APR
- 680-699: ~6.65% APR
- 660-679: ~6.86% APR
- 640-659: ~7.29% APR
- 620-639: ~7.84% APR
Notice how just a few points can bump you into a new tier. If your score is 718 versus 720, that small difference could mean a better rate. But if your score drops into a lower tier before closing, your rate could climb.
The Real Cost of a Low Credit Score
Let’s put real numbers to this. On a $400,000, 30-year fixed-rate mortgage, here’s what different credit scores could cost you:
760+ Credit Score
- Rate: 6.25%
- Monthly payment: $2,462
- Total interest paid: $486,398
680 Credit Score
- Rate: 6.65%
- Monthly payment: $2,566
- Total interest paid: $523,796
620 Credit Score
- Rate: 7.84%
- Monthly payment: $2,886
- Total interest paid: $639,128
The difference between a 760 and 620 credit score: $424 more per month and over $152,000 more in total interest over the life of the loan.
Even improving from 680 to 760 saves you $104 per month and approximately $37,000 in total interest. That’s why working on your credit before buying can be one of the smartest financial moves you make.
Credit Score Changes for 2026
The mortgage industry is undergoing significant changes in how creditworthiness is evaluated:
New Credit Scoring Models
The Federal Housing Finance Agency (FHFA) has mandated that Fannie Mae and Freddie Mac adopt VantageScore 4.0 (already available) and FICO 10T (rolling out in early 2026). These newer models:
- Consider “trended” credit data showing how you’ve managed credit over time
- Include alternative data like rent, utility, and phone bill payments
- May help approximately 5 million additional Americans qualify for mortgages or receive better rates
Fannie Mae’s Minimum Score Elimination
In November 2025, Fannie Mae eliminated its minimum 620 credit score requirement from its Selling Guide. Instead, the focus has shifted to evaluating borrowers based on multiple factors including loan purpose, property characteristics, reserves, and debt levels.
FHFA Director William Pulte clarified that underwriting standards remain essentially unchanged — this move primarily ensures lenders can use either VantageScore or FICO scores rather than being locked into one system.
Other Factors Lenders Consider
While your credit score opens the door, lenders evaluate your complete financial picture:
Debt-to-Income Ratio (DTI)
Your DTI compares your monthly debt payments to your gross monthly income. Most lenders prefer:
- Conventional loans: 43-45% maximum DTI
- FHA loans: Up to 50% with compensating factors
- VA loans: No hard maximum, but 41% is a common guideline
Down Payment
A larger down payment reduces the lender’s risk and can help offset a lower credit score. It also affects your loan-to-value (LTV) ratio, which impacts your rate and whether you’ll pay private mortgage insurance (PMI). Check out our guide on buying a house with no money down if saving for a down payment is challenging.
Employment and Income Stability
Lenders typically want to see at least two years of stable employment and consistent income. Self-employed borrowers may need to provide additional documentation including tax returns and profit/loss statements.
Assets and Reserves
Having savings beyond your down payment and closing costs demonstrates financial stability. Some loan programs require specific reserve amounts (often 2-6 months of mortgage payments).
How to Improve Your Credit Score Before Buying
If your credit score isn’t where you want it, here are proven strategies to boost it:
Pay Down Credit Card Balances
Credit utilization — the percentage of available credit you’re using — accounts for about 30% of your FICO score. Aim to keep utilization below 30%, and ideally below 10%, on each card and overall.
Make Every Payment on Time
Payment history is the single biggest factor in your credit score (35%). Set up autopay for at least the minimum payment on all accounts to avoid late payments.
Don’t Close Old Accounts
The length of your credit history matters. Closing old accounts shortens your average account age and reduces your total available credit, potentially hurting your score.
Dispute Errors on Your Credit Report
Request your free credit reports from AnnualCreditReport.com and review them for errors. Incorrect late payments, wrong account balances, or accounts that aren’t yours can all drag down your score.
Become an Authorized User
If a family member has a credit card with a long history of on-time payments and low utilization, being added as an authorized user can help boost your score.
Avoid New Credit Applications
Each hard inquiry can lower your score by a few points. Hold off on applying for new credit cards or auto loans until after you’ve closed on your mortgage.
Should You Wait to Improve Your Score?
This is one of the most common dilemmas for homebuyers. Here’s how to think through it:
Consider Waiting If:
- Your score is close to a tier threshold (e.g., 715 vs. 720) and you could cross it in a few months
- You’re below 620 and would only qualify for FHA loans with higher rates and mandatory mortgage insurance
- You have recent negative marks (late payments, collections) that will age off soon
- You’re carrying high credit card balances you could pay down quickly
Consider Buying Now If:
- Home prices in your market are rising faster than your potential rate savings
- Your credit improvement would take years, not months
- You’ve found the right home and can afford the current payment
- You can refinance later if rates drop or your credit improves
Real estate professionals often say “marry the house, date the rate” — meaning you should buy when you find the right home and refinance later if conditions improve. Use our mortgage calculator to see what payments would look like at different rates.
Frequently Asked Questions
The absolute minimum is 500 with an FHA loan, though you’ll need a 10% down payment. With a 580 score, you can put just 3.5% down on an FHA loan. Conventional loans typically require at least 620.
First-time buyers have the same requirements as repeat buyers. FHA loans are popular with first-timers because of the lower 580 credit score minimum and 3.5% down payment. Many state and local first-time buyer programs pair with FHA loans.
Yes, 700 is considered a “good” credit score and will qualify you for most mortgage programs with competitive rates. You won’t get the absolute best rates (reserved for 760+), but you’ll have solid options.
Yes, you can qualify for an FHA loan with a 600 credit score using a 3.5% down payment. Some VA and USDA lenders may also work with 600 scores. You’ll pay higher interest rates than someone with better credit, but homeownership is achievable.
The difference between the best rates (760+ score) and minimum qualifying rates (620 score) can be 1.5% or more. On a $400,000 loan, that translates to roughly $400 per month and over $150,000 in additional interest over 30 years.
Most mortgage lenders pull credit reports from all three bureaus (Experian, TransUnion, and Equifax) and use the middle score. They typically use older FICO models: FICO Score 2 (Experian), FICO Score 5 (Equifax), and FICO Score 4 (TransUnion). VantageScore 4.0 and FICO 10T are being adopted starting in 2026.
It depends on what’s affecting your score. Paying down credit card balances can boost your score within one billing cycle. Disputing errors might take 30-45 days. Building positive payment history takes longer — typically 3-6 months minimum to see meaningful improvement.
No. Checking your own credit is a “soft inquiry” that doesn’t affect your score. When lenders check your credit for a loan application, that’s a “hard inquiry” which can lower your score by a few points. Multiple mortgage inquiries within 14-45 days (depending on the scoring model) count as a single inquiry, so you can shop around without penalty.
It depends. For FHA loans, you may need to pay off or have a payment plan for collections over $2,000. For conventional loans, newer scoring models like FICO 9 and VantageScore 3.0 ignore paid collections entirely. Consult with a loan officer about your specific situation before paying off old collections.
Yes, 620 is typically the minimum for conventional loans. However, you’ll receive higher interest rates and will need to meet other requirements for debt-to-income ratio and down payment. A higher score (680+) will give you significantly better terms.
A mortgage pre-approval involves a hard credit inquiry, which may lower your score by a few points temporarily. Pre-qualification (without a hard pull) doesn’t affect your score. The small impact of a pre-approval is worth it to know your true buying power, and your score typically recovers within a few months.
You have options. You can apply for the mortgage in only one spouse’s name using only their income and credit. This may reduce your borrowing power but could secure a better rate. Some loan programs, like FHA, use the lower of the two borrowers’ middle scores, which could push you into a higher rate tier.
The Bottom Line
You don’t need perfect credit to buy a house, but your credit score significantly impacts your mortgage options and costs. The minimum credit scores are 500 for FHA loans with 10% down, 580 for FHA with 3.5% down, and typically 620 for conventional, VA, and USDA loans.
However, meeting the minimum is just the beginning. The real question is what rate you’ll receive and how much that will cost over time. A borrower with a 760+ credit score can save over $150,000 compared to a borrower with a 620 score on a $400,000 mortgage.
If your score needs work, focus on paying down credit card balances, making all payments on time, and disputing any errors on your credit reports. Even small improvements can bump you into a better rate tier and save you thousands.
Ready to see where you stand? Check your home loan eligibility to get personalized rate quotes based on your credit profile.
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