Generally, a credit score of 620 or higher will get the best terms for a mortgage. A higher credit score can make the underwriting and approval process faster and easier, as well as get a better interest rate. A higher credit score means that you are less risky for the lender to give money to. It shows that you have always paid back previous loans as well as covered your bills and expenses.
Minimum Credit Score Requirements by Loan Type
Different mortgage programs cater to different financial situations. Here is what you need to qualify for each option:
| Mortgage Type | Minimum Credit Score | Key Feature |
| Conventional Loan | 620 | Ideal for buyers with stable credit and at least 3% down. |
| FHA Loan | 580 (3.5% down) / 500 (10% down) | Great for first-time buyers with flexible credit rules. |
| VA Loan | 580 – 620 (Lender requirement) | $0 down payment option for eligible veterans and service members. |
| USDA Loan | 640 | $0 down payment option for qualifying homes in rural areas. |
| Jumbo Loan | 680 – 700+ | Required for luxury homes exceeding standard conforming loan limits. |
What if I have a credit score below 620?
For those with lower credit scores, home ownership can still be an option. You may need to have more funds available for a down payment, get a higher interest rate on your loan, or have someone co-sign on the loan with you.
Another option is using the FHA loan, a mortgage that is backed by the Federal Housing Administration. For those with credit scores above 580, a down payment of 3.5% is required. For those with credit scores between 500 and 579, a 10% down payment is required. This program is designed to make homeownership an option for those with lower credit while still working for lenders.
How do I improve my credit?
If you want to get the best financing terms, it can be helpful to take some time to improve your credit before applying for a mortgage.
Here are five simple steps you can take over 30 to 90 days to boost your numbers:
- Check Your Credit Report for Errors
- Pay Down Credit Card Balances
- Pay All Bills on Time
- Avoid Opening New Credit Lines
- Keep Old Accounts Open
Fortunately, this also allows you more time to save up for a down payment. Overall, this makes you much less risky to lenders and more likely to get approved for a mortgage with great terms.
Knowing your credit score is just the beginning. At Lock It Mortgage, we compare rates across multiple lenders to find the best home loan program tailored to your financial goals.
Contact us today or use our Mortgage Calculator to estimate your monthly payments!
