Credit Score for Mortgage: What You Actually Need
Minimum requirements, which score version lenders use, and how your score translates to real dollar costs.
Getting approved for a mortgage and getting a good rate are two different things.
You can technically qualify with a 580 credit score. But the rate you get at 580 versus 760 will cost you tens of thousands of dollars over the life of the loan.
Here's exactly what lenders look at, the minimum requirements by loan type, and how to optimize your score before applying.
Minimum Credit Score by Loan Type
| Loan Type | Minimum Score | Down Payment | Notes |
|---|---|---|---|
| FHA | 580 | 3.5% | 500-579 requires 10% down |
| Conventional | ~620 (most lenders) | 3-20% | PMI required under 20%. Fannie Mae's automated system no longer sets a hard minimum |
| VA | None (VA) | 0% | Lenders typically want 620+ |
| USDA | No USDA minimum (lenders set their own) | 0% | Rural areas only |
| Jumbo | 700-720+ | 10-20% | Stricter requirements |
Which Score Do Mortgage Lenders Use?
⚠️ Critical: Not the Score You See Online
Most mortgage lenders still use older "Classic" FICO versions: FICO Score 2 (Experian), FICO Score 5 (Equifax), and FICO Score 4 (TransUnion). Since September 9, 2026, any lender selling loans to Fannie Mae or Freddie Mac can use VantageScore 4.0 instead. FICO 10T is approved but not yet accepted. Either way, it may not match the score you see on Credit Karma or most free apps.
Lenders pull all three bureau scores and use the middle score. If your scores are 650, 680, and 710, they use 680.
For joint applications, lenders use the lower middle score between both applicants.
The Cost of Each Score Tier
On a $350,000, 30-year fixed mortgage (myFICO national averages, May 2026; real rates vary by lender, down payment, DTI and market):
| FICO Score | Avg. Rate | Monthly Payment | Total Interest |
|---|---|---|---|
| 760-850 | 6.70% | $2,258 | $463,050 |
| 700-759 | 6.95% | $2,317 | $484,054 |
| 680-699 | 7.07% | $2,345 | $494,213 |
| 660-679 | 7.11% | $2,354 | $497,610 |
| 640-659 | 7.21% | $2,378 | $506,126 |
| 620-639 | 7.36% | $2,414 | $518,963 |
The difference: 620 vs 760 = about $56,000 extra interest on the same loan (about $155 a month).
Even jumping one tier (e.g., 680 to 700) can save $10,000+ over the loan's life.
6-Month Mortgage Prep Timeline
- • Pull all three credit reports (AnnualCreditReport.com)
- • File disputes for any errors
- • Calculate debt-to-income ratio
- • Begin aggressive debt paydown
- • STOP all new credit applications
- • Target all card utilization under 30%
- • Request credit limit increases (soft pull only)
- • Resolve any pending disputes
- • Don't close any accounts
- • Target utilization under 10%
- • Verify nothing has changed on reports
- • Prepare income documentation
- • Make no profile changes
- • Pay all cards to near-zero (AZEO method)
- • Verify final utilization is ultra-low
- • Shop rates within a 14-day window to be safe
What NOT to Do Before Applying
🚫 Mortgage Application Don'ts
- • Don't open ANY new credit accounts
- • Don't close ANY existing accounts
- • Don't make large purchases on credit
- • Don't move large sums between accounts (looks like undisclosed loans)
- • Don't co-sign for anyone
- • Don't change jobs if you can avoid it
- • Don't pay old collections without checking first — paying won't change when it leaves your report, but can restart your state's lawsuit clock
The Rate Shopping Window
FICO counts mortgage inquiries made within a 14- to 45-day window (depending on the score model) as a single inquiry. Keep your shopping within 14 days to be safe.
Use this to your advantage: get quotes from 3-5 lenders within a 2-week period. The inquiries won't stack up against you.
Rapid Rescore: The Last-Minute Fix
If your score is just below a tier threshold during underwriting, ask your lender about a rapid rescore.
💡 How Rapid Rescore Works
- • You pay down a balance or fix an error
- • Lender pays the bureaus to update immediately (3-5 days)
- • Only lenders can initiate — you can't do it yourself
This can bump you from 679 to 685, potentially saving thousands in interest.
Collections and Mortgages: The Fannie Mae Rules
Good news: You may not need to pay off all collections to qualify.
- Medical collections — Don't have to be paid off under Fannie Mae automated underwriting (they can still lower your score)
- Non-medical collections (one-unit primary home) — Don't need to be paid if automated underwriting approves
- 2-4 units and second homes — Must be paid if they total over $5,000
- Investment properties — Accounts of $250+ must be paid, and all of them if the total is over $1,000
On FHA loans, if collections total $2,000 or more, the lender may count 5% of the balance as a monthly payment in your debt-to-income ratio, even if unpaid.
After Bankruptcy: When Can You Buy?
| Loan Type | Chapter 7 Wait | Chapter 13 Wait |
|---|---|---|
| FHA | 2 years from discharge | 1 year (w/ trustee approval) |
| VA | 2 years from discharge | 1 year (w/ trustee approval) |
| Conventional | 4 years from discharge | 2 years from discharge |
| USDA | 3 years from discharge | 1 year (w/ trustee approval) |
The Bottom Line
Getting approved is the first hurdle — FHA at 580, and most conventional lenders still look for about 620, though Fannie Mae's system no longer sets a hard minimum.
Getting a good rate is where the real money is. Moving up even one score tier can save you thousands over the loan term.
The most important advice: start 6 months early. Optimize utilization, fix errors, and avoid any new credit activity. The prep work pays for itself many times over.
Use our guides on utilization optimization and statement timing to squeeze out every possible point before you apply.