Minimum Credit Score Requirements by Loan Type
| Loan Type | Minimum Credit Score |
|---|---|
| Conventional Loan | 620+ |
| FHA Loan | 500 (10% down) / 580 (3.5% down) |
| VA Loan | No official minimum, but 620+ recommended |
| USDA Loan | 640+ |
Why Your Credit Score Matters
Your credit score affects mortgage approval, interest rates, and loan terms. A higher score can save you thousands in interest.
How to Improve Your Credit Score Before Buying a Home
- 📈 Pay down existing debt – Lower debt-to-income ratio.
- ✔ Make on-time payments – Payment history is a major factor.
- 🔄 Avoid opening new credit accounts – Hard inquiries can lower your score.
- 📝 Check your credit report for errors – Dispute inaccuracies.
Does a Higher Credit Score Get You a Better Mortgage Rate?
Yes! Here’s how credit score impacts mortgage rates on a 30-year $300,000 loan:
| Credit Score | Estimated Interest Rate | Monthly Payment |
|---|---|---|
| 760-850 | 6.25% | $1,847 |
| 700-759 | 6.50% | $1,896 |
| 660-699 | 7.00% | $1,995 |
| 620-659 | 7.50% | $2,097 |
The Bottom Line
A higher credit score gets you better mortgage rates and can save you thousands over the life of the loan.
“Your credit score is one of the most important factors in getting the best mortgage deal.”
— Sarah Thompson, Mortgage Expert
Frequently Asked Questions
Can I buy a house with a 500 credit score?
Yes, with an FHA loan and 10% down, but options may be limited.
What’s the fastest way to improve my credit score?
Pay down debt, make on-time payments, and avoid new credit inquiries.
How much can I save with a higher credit score?
Higher scores qualify for lower rates, saving thousands over time.