What Credit Score Is Needed for a Mortgage: Minimums by Loan Type

You’re ready to buy a home and keep seeing different answers about what credit score is needed for a mortgage. Here’s the short version: most conventional lenders look for a 620+ FICO Score, FHA can go lower, and VA/USDA don’t set a hard minimum—but lenders often do. The longer version matters, because your exact score affects your rate, down payment, mortgage insurance, and even which loan types you’ll qualify for.

This guide breaks down minimum credit scores by loan type, how lenders actually read your credit, and what to do if you’re close but not quite there. We’ll also show how your score influences your interest rate and private mortgage insurance (PMI), with plain-English examples.

Quick answer: typical credit score ranges and what they mean

• 760 and above: Excellent. Typically qualifies for the best conventional rates and the lowest PMI on low-down-payment loans.
• 740–759: Very good. Nearly top-tier pricing in most cases.
• 720–739: Good. Competitive rates; small pricing hits versus top tier.
• 700–719: Solid. Approvals are common; rates are a bit higher than top tiers.
• 680–699: Fair. More pricing adjustments; still widely approvable on conventional.
• 660–679: Fair. Approvals possible, but pricing adjustments and PMI costs increase.
• 640–659: Borderline for conventional. FHA may be cheaper overall at this level.
• 620–639: Conventional minimum threshold for many lenders; FHA often more forgiving.
• 580–619: FHA territory for many borrowers (3.5% down typically available at 580+).
• 500–579: FHA may approve with 10% down, but many lenders set higher internal minimums (called overlays).
• Below 500: Mortgage options are very limited; focus on rebuilding first.

Important: These are general ranges. Actual approvals and pricing vary by lender, loan type, down payment, debt-to-income ratio (your monthly debt divided by monthly income), and property factors.

What credit scoring models lenders use (FICO vs. VantageScore)

Here’s the part most people don’t hear: the credit score you see in your favorite app is often not the same score your mortgage lender will use.

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• Mortgage lenders have traditionally used older “mortgage” versions of FICO: FICO Score 2 (Experian), FICO Score 4 (TransUnion), and FICO Score 5 (Equifax). These are different from the newer FICO 8/9/10 scores you might see elsewhere.
• As of 2026, many conforming lenders (those selling to Fannie Mae/Freddie Mac) are in transition toward using newer models like FICO 10T and VantageScore 4.0. Adoption timelines vary, so your lender may still rely on the older mortgage FICO versions for now.
• Lenders typically pull credit from all three bureaus and use your “middle score” (the one between your high and low). If there are two borrowers, most lenders use the lower of the two middle scores for pricing and eligibility.

If your app shows a VantageScore or a newer FICO that looks higher (or lower) than expected, don’t panic. It’s normal to see differences across models. What matters is the score version your lender uses on the day they pull credit.

Tip: Before you apply, review all three credit reports for errors and fix any issues you spot. If you’re new to how scores work, see our explainer: Understanding Your Credit Score: What It Is and How to Improve It (/credit-cards/understanding-credit-score).

Minimum credit scores by loan type

Below are typical minimums and how lenders may treat them. Lenders can add their own overlays (stricter rules than the program minimum), especially if your debt-to-income ratio is high, your down payment is small, or your file is “thin” (not much credit history).

Conventional (Fannie Mae / Freddie Mac) minimums and overlays

• Typical minimum: 620 FICO.
• Down payment: As low as 3% for first-time buyers through programs like HomeReady/Home Possible (income and property eligibility apply). Otherwise, 5% down is common.
• Overlays: Some lenders may require 640–660+ for certain scenarios, such as adjustable-rate mortgages (ARMs), multi-unit properties, or high debt-to-income ratios.
• Pricing: Conventional loans use Loan-Level Price Adjustments (LLPAs)—essentially risk-based fees that depend on your credit score, down payment, occupancy, and more. LLPAs can be charged as upfront points (a fee) or baked into a higher rate. Higher scores and larger down payments reduce LLPAs.
• Mortgage insurance: If you put down less than 20%, you’ll usually pay private mortgage insurance (PMI). PMI costs drop with higher credit scores and larger down payments.

When conventional may make sense: If your score is 680+ and you can put at least 3–5% down, conventional often wins on total cost—especially if you can cancel PMI after building equity.

FHA minimums and how compensating factors are used

• Program minimum: 500 FICO with 10% down; 580+ allows 3.5% down.
• Lender overlays: Many lenders set their minimum at 580–620 for smoother approvals.
• Mortgage insurance: FHA has an upfront mortgage insurance premium (MIP) of 1.75% of the loan amount (typically financed) and an annual MIP that’s paid monthly. For many 30-year FHA loans with minimum down payment, the annual MIP is often around 0.55% of the loan amount (rates vary by term/loan size/loan-to-value and can change).
• Flexibility: FHA is generally more forgiving of lower credit scores and past credit events after required waiting periods, and it allows manual underwriting.
• Compensating factors: If your score is on the lower end or your debt-to-income ratio is high, underwriters may look for extra strengths to balance the risk—called compensating factors. Examples include: a larger down payment, cash reserves (savings left after closing), a strong history of on-time rent, or a low payment shock (your new mortgage payment isn’t much higher than your current rent).

When FHA may make sense: If your score is below ~680 or you need more flexible underwriting, FHA can deliver a lower overall payment than conventional even with mortgage insurance—especially for 620–660 scores.

VA and USDA program requirements

• VA loans (for eligible veterans, service members, and some surviving spouses): The VA itself does not set a minimum credit score. That said, many lenders use overlays around 620; some will go lower (e.g., 580) with strong compensating factors. VA focuses heavily on residual income (money left over after paying major obligations), which can help offset a lower score.
• USDA loans (for eligible rural properties and income limits): The USDA program doesn’t publish a strict minimum score, but automated approvals through GUS (Guaranteed Underwriting System) are typically most successful at 640–680+. Below that, manual underwriting may be possible with strong compensating factors. Many lenders set overlays at 640.

Why these programs can be appealing: VA and USDA offer 0% down options (depending on eligibility and property), and mortgage insurance costs can be competitive. As always, lender overlays and local property eligibility (for USDA) apply.

Jumbo loans and portfolio lenders

• Jumbo loans (loan amounts above your area’s conforming limit) often require higher scores—commonly 680–700 minimum, and 720+ for the best pricing.
• Expect stricter requirements: larger down payments (often 10–20%+), strong reserves (months of payments in savings), and lower debt-to-income ratios.
• Portfolio lenders (banks/credit unions that keep loans on their own books) can be more flexible with unique profiles—self-employed borrowers using bank statements, high-asset/low-income scenarios, or recent credit events. Minimum scores vary widely by lender and product; rates and fees are typically higher for non-QM (non–Qualified Mortgage) products.

How your credit score affects mortgage rates, down payment, and PMI

Your credit score affects your mortgage in three big ways:

1. Your interest rate and fees (via LLPAs or program pricing)
2. Whether you’ll owe PMI/MIP, and how much
3. How much debt the system will allow you to carry relative to your income (your max debt-to-income ratio)

Rate impact: a practical way to think about it

Mortgage pricing is tiered by score ranges. While exact tiers vary by lender and day, here’s a common structure for conventional 30-year fixed loans with 20% down:

• 760+ = best tier
• 740–759 = near-best
• 720–739 = strong
• 700–719 = solid
• 680–699 = average
• 660–679 = below average
• 640–659 = weak for conventional
• 620–639 = edge of eligibility for many lenders

A rule of thumb: every 0.25% change in interest rate usually moves your payment by roughly $15 per month per $100,000 borrowed (on a 30-year fixed). That’s not a quote—just a quick way to estimate impact.

Example (illustrative only, not a rate quote):

• Loan amount: $400,000, 30-year fixed, conventional, 20% down
• Borrower A: 760 FICO, rate 6.625%
• Borrower B: 660 FICO, rate 7.375%
• Rate difference: 0.75%
• Estimated payment impact: about $45 per month per $100,000 × 4 = ~$180/month more for Borrower B.

That $180/month is just from the rate. If you add PMI (for <20% down) with a lower score, the gap can widen further.

PMI and MIP: how score changes the math

• Conventional PMI (private mortgage insurance) varies by score and down payment. Higher scores pay meaningfully less. Example (illustrative): On a $350,000 loan with 5% down, a 760 FICO borrower might pay a modest PMI premium, while a 640 FICO borrower could pay several times more each month. Actual quotes vary by insurer, loan features, and state.
• FHA MIP is more standardized and less score-sensitive. With FHA, the annual MIP rate is primarily based on down payment and loan term—often around 0.55% for many 30-year, minimum-down loans, plus a 1.75% upfront premium (usually financed). If your score is in the low-to-mid 600s, FHA’s steadier MIP can make it cheaper overall than conventional PMI.
• VA has a funding fee (which can be financed) instead of monthly PMI, and USDA has a guarantee fee and annual fee. These are generally not driven by your credit score the way conventional PMI is, but they depend on factors like service history (VA) and down payment.

DTI flexibility and AUS approvals

Automated underwriting systems (AUS) like Desktop Underwriter (Fannie Mae) and Loan Product Advisor (Freddie Mac) often allow higher debt-to-income ratios for stronger files. Higher scores can help push a file from a “refer” to an “approve/eligible” finding, sometimes enabling a higher max DTI (for example, up to 50% in certain cases) or reducing required reserves.

Minimums by loan type: deeper dive and real-world scenarios

Conventional: 620+ minimum (typical), with LLPA pricing

• Who it helps: Borrowers with 620+ who can put 3–5% down or more, and who want the ability to remove PMI once equity is 20–22%.
• Watch for: Pricing hits for lower scores, smaller down payments, condos, multi-units, investment properties, and cash-out refinances. Ask your lender to show you the LLPA impacts in points and in rate.

Scenario: You’re at 702 FICO with 5% down on a $425,000 purchase. Your loan officer shows you two options—pay 1.0 point to keep the rate lower or take a higher rate with zero points. If you plan to keep the loan 3–5 years, the lower-cost option might win; if 10+ years, paying points may save more in total interest. The right choice depends on your horizon and the break-even math.

FHA: 580+ for 3.5% down; 500–579 with 10% down

• Who it helps: Borrowers with lower scores, limited credit history, or past credit events after wait periods. FHA can be more forgiving on debt-to-income ratios and manual underwriting.
• Watch for: Upfront and annual MIP, property standards (FHA appraisals can be stricter), and loan limits by county. If you plan to refinance out of FHA MIP later, factor in closing costs and possible future rates.

Scenario: You’re at 635 FICO buying a $350,000 home with 3.5% down. FHA’s steadier MIP may yield a lower monthly payment than a conventional loan with PMI at the same score—especially if conventional PMI quotes are high. If your score could rise to 680+ in 6–12 months, you might compare waiting versus buying now.

VA: No program minimum; many lenders use 600–620 overlays

• Who it helps: Eligible veterans and service members, particularly those with limited down payment and strong residual income.
• Watch for: Lender overlays, residual income requirements (region- and family-size-based), and the VA funding fee (which may be reduced or waived for certain disability ratings).

Scenario: You’re at 610 FICO with stable income and strong residual income. Some lenders may decline due to an overlay of 620, but others will consider your full profile—residual income, rent history, and down payment—even if it’s modest.

USDA: No hard program minimum; 640–680+ is typical for smoother approvals

• Who it helps: Buyers in eligible rural and some suburban areas who meet income limits and want 0% down.
• Watch for: Property eligibility, income caps, annual fee, and lender overlays (many set 640 as a floor). Manual underwriting can work with strong compensating factors.

Scenario: You’re at 655 FICO and buying in a USDA-eligible area with income under the limit. With stable job history and modest debts, your lender’s automated findings may approve you at 0% down.

Jumbo and portfolio: 680–720+ typical minimums; more reserves and down payment

• Who it helps: Borrowers above conforming loan limits or with non-standard income profiles.
• Watch for: Tighter credit and asset requirements, documentation, and higher pricing. For non-QM portfolio loans (e.g., bank-statement programs), expect higher rates/fees and potentially 10–20%+ down.

Scenario: You’re at 700 FICO buying a $1.2M home with 20% down and six months of reserves. Many jumbo programs can work; at 660 FICO, you may need more reserves or a larger down payment—or accept higher pricing.

What to look for when comparing lenders

• Ask which score version they’ll use and whether they’re still using the older mortgage FICOs or moving to newer models.
• Confirm minimum credit score overlays for your exact loan type and property (condo vs. single-family, primary residence vs. investment).
• Request a side-by-side quote showing rate, APR, points, lender fees, and monthly PMI/MIP if applicable.
• Have them price multiple down payment options (e.g., 3%, 5%, 10%, 20%)—the sweet spot for total cost can shift with your score.
• If close to a score threshold (e.g., 679 vs. 680), ask how a small improvement would change pricing. Sometimes a quick utilization drop can unlock a better tier.

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If you’re actively shopping rates, see our guide on comparing today’s mortgage rates: Mortgage Rates: How to Compare Today’s Rates and Save on Your Loan (/auto-insurance/mortgage-rates-how-to-compare-todays-rates-and-save).

How to improve your score before applying (fastest levers first)

• Lower your credit card utilization: Your utilization (balances ÷ credit limits) is a major score driver. Paying revolving balances down under 30%—and ideally under 10%—before the statement closes can boost your score within one or two cycles.
• Avoid opening or closing accounts right before applying: New accounts and recent hard inquiries can ding your score; closing old cards can reduce your average age of credit and available limits.
• Dispute clear errors: Late payments or collections that don’t belong to you, or outdated negatives that should’ve fallen off, can meaningfully affect approval and pricing.
• Build positive history: If your file is thin, tools like secured cards, credit-builder loans, or becoming an authorized user on a well-managed account can help (just be sure the primary user never carries high balances or misses payments).

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Need a refresher on score basics and improvement strategies? Start here: Understanding Your Credit Score: What It Is and How to Improve It (/credit-cards/understanding-credit-score).

FAQs: what lenders don’t always tell you

• Which score counts if I have three? The lender typically uses your middle score. With co-borrowers, the lender usually prices and underwrites to the lower middle score.
• Do different bureaus matter? Yes. Some debts get reported to one or two bureaus but not all three. That can make one score lag behind. The lender sees them all.
• Can I qualify with a thin file or no traditional credit? Possibly. FHA, VA, and some portfolio lenders allow “non-traditional credit” (e.g., rent, utilities) with manual underwriting. Expect more documentation and possibly higher reserves/down payment.
• Are medical collections treated differently? Many newer scoring models de-emphasize medical collections, but older mortgage FICOs may still weigh them negatively. Settling or removing small medical collections can sometimes help.
• Should I pay points to get a lower rate? Sometimes. Weigh the upfront cost against how long you’ll keep the mortgage and your break-even timeline.

The bottom line on what credit score is needed for a mortgage

• Conventional loans typically require 620+ FICO, with better pricing above 680 and top-tier at 740–760+.
• FHA can approve with scores from 500–579 (10% down) and 580+ (3.5% down), and is more forgiving on past credit hiccups.
• VA and USDA don’t set hard score minimums, but many lenders use overlays (often 620). Strong residual income (VA) and clean payment history can help.
• Jumbo and portfolio loans usually want 680–720+, plus bigger down payments and reserves.

Ultimately, your credit score is one lever among many—down payment, debt-to-income ratio, property type, assets, and income stability all matter.

If you’re getting close to buying, talk with a licensed mortgage professional. They can run your scenario through automated underwriting, explain compensating factors, and show the payment trade-offs by credit tier. And once you close, make sure your new home is protected with the right coverage: Best Home Insurance for New Homeowners: Top Picks, Costs, and What to Look For (/home-insurance/best-home-insurance-new-homeowners-top-picks-costs).

Next step: Check your three-bureau reports, tidy up utilization, and get two to three pre-approvals so you can compare rates and costs side by side. Then lock when you find the right combination of payment, points, and program.

Compliance note: Examples here are for education only—not rate or approval offers. Loan guidelines and pricing change frequently and vary by lender, state, and your individual profile.