Your credit score does not just determine whether you get a mortgage, it determines how much you pay for it every month for decades. A 40-point difference in score can cost or save you tens of thousands in interest. Here is where you stand.

Minimum scores by loan type

Lenders set floors, and they differ by program:

  • Conventional loan: 620 minimum at most lenders. Below that, you will generally need a government-backed program.
  • FHA loan: 580 for 3.5% down; 500–579 possible with 10% down (though few lenders actually go that low).
  • VA loan: No official minimum from the VA itself, but most lenders require 580–620.
  • USDA loan: No official minimum, but lenders typically want 640+.

Meeting the minimum gets you approved. It does not get you a good rate.

Where the real savings start

Mortgage pricing tiers reward higher scores in steps. The biggest jumps happen around these lines:

  • 760+: Best rates. This is the top tier at most lenders.
  • 740–759: Nearly the best, often within an eighth of a point of top-tier pricing.
  • 700–739: Good rates, but you are paying a noticeable premium versus 760+.
  • 680–699: You will feel it, roughly a quarter to half point higher than top tier.
  • 620–679: Approved, but expensive. The rate premium here is real money.

On a $400,000 loan, the difference between a 7.0% rate (good credit) and 7.5% (fair credit) is about $130/month, or roughly $47,000 over 30 years. That is the price of a mediocre score, paid monthly for three decades.

How to improve your score before applying

If you are 6–12 months from buying, these moves have the highest return:

  1. Pay down revolving balances. Credit utilization, your balances relative to limits, is the fastest lever. Getting utilization under 30% helps; under 10% is ideal.
  2. Do not close old cards. Length of credit history matters, and closing your oldest card shortens your average account age.
  3. Do not open new credit. Every application is a hard inquiry, and new accounts lower your average age. Freeze new applications for at least 6 months before mortgage shopping.
  4. Dispute genuine errors. Wrong late payments or accounts that are not yours can often be removed, sometimes worth dozens of points.
  5. Become an authorized user on a family member's old, clean card if your own history is thin.

Avoid "rapid rescore" gimmicks and anyone promising to delete accurate negative items. They cannot.

Rate shopping without hurting your score

Multiple mortgage inquiries within a focused window, typically 14 to 45 days depending on the scoring model, count as a single inquiry for scoring purposes. So shop aggressively: get quotes from at least 3–5 lenders. The rate difference between lenders is often larger than people expect, and comparing is free.

The bottom line

620 gets you in the door; 740+ gets you the good rates; 760+ gets you the best. If you are close to a tier boundary, even 20 points can be worth thousands, so it pays to wait and polish your score before you lock. Once you know your score, run the numbers with our mortgage calculator and home affordability calculator to see what you can actually afford at your rate.

Estimates for planning only, not financial advice.