What’s a Good Credit Score for a Mortgage


What’s a Good Credit Score for a Mortgage

April 5, 2022
Certified Credit

Purchasing a home is a dream for many Americans. However, only a small portion of people have enough cash on hand to buy a home outright. Luckily, aspiring homeowners can take out mortgages to make their American dream come true.

If you’re interested in applying for a mortgage and purchasing a home, you may be wondering what the credit score requirements are. The minimum credit score you’ll need to qualify for a mortgage varies depending on the type of mortgage you apply for. If you want to qualify for a low-interest rate, you’ll most likely need a credit score well above these minimums. 

So, what’s a good credit score for a mortgage? Below, we’ll break it down for you. 

What Components Make Up Your Credit Score

Before we jump into the mortgage credit score requirements, let’s review the five factors that make up your credit score.Ninety percent of lenders look at FICO credit scores during the mortgage application process. Your FICO credit score is based on your:

  • Payment history – 35%
  • Credit utilization – 30%
  • Length of credit history – 15%
  • Credit mix – 10%
  • New credit – 10%

Credit scores can range from 300 to 850. The higher your credit score is, the better. 

What Credit Score is Required to Buy a Home?

Lenders’ credit score requirements may vary, but you typically need a credit score of 620 or above to qualify for a mortgage.3 However, having a credit score of 620 doesn’t guarantee that you’ll get approved. Other factors can impact your eligibility. 

Additionally, most lenders prefer to lend money to borrowers with credit scores that are well above the 620 minimum. In fact, borrowers with credit scores below 650 make up a tiny portion of all mortgage holders. 

Having a high credit score can help you qualify for a mortgage, as well as more favorable terms, such as:

  • Larger loan amounts
  • Lower interest rates
  • Longer repayment periods
  • Smaller down payment requirements

Minimum Credit Score by Loan Type

While 620 is the average credit score requirement for most mortgage lenders, requirements vary depending on the type of mortgage you apply for.

Let’s take a look at the different types of mortgages and their specific credit score requirements:

Conventional Mortgages

As its name suggests, a conventional mortgage is an ordinary mortgage granted to you by a private lender (i.e. a bank, credit union, etc). Unlike other types of mortgages, conventional mortgages are not insured by government agencies. Thus, lenders have more to lose if their borrowers default on their conventional mortgages. As a result, conventional mortgages often have stricter eligibility requirements than other types of mortgages.

There are two types of conventional loans:

        • Conforming mortgages meet the Federal Housing Finance Agency (FHFA) requirements and yearly loan limits. For example, in 2022 the limit is $647,200 throughout most of the US or $970,800 in higher living cost areas.4
        • Nonconforming mortgages, also known as jumbo loans, exceed the limits mentioned above. To qualify for these types of mortgages, you’ll typically need a higher credit score and a larger down payment.

To qualify for either type of conventional mortgage, you must have a credit score of at least 620. However, the average conventional mortgage borrower has a credit score of 757.

FHA Mortgages

Another type of mortgage you can apply for is an FHA loan. These mortgages are insured by the Federal Housing Administration. Thus, lenders can be reimbursed by the government if their borrowers default on their FHA mortgages.5

Since these types of mortgages are less risky for lenders, FHA loans often have more lenient requirements. The minimum credit score requirement for an FHA mortgage depends on your down payment amount:6

        • 10% down – You must have a credit score of 500 or above.
        • 3.5% down – You must have a credit score of 580 or above.

While these are the credit score requirements outlined by the Federal Housing Administration, lenders that originate FHA mortgages may have higher credit score requirements. The average FHA loan borrower has a credit score of 677. Only 0.33% of FHA loan borrowers have credit scores under 549.7 

Even though FHA mortgages stand out for their flexible credit score requirements, they also come with stricter property standards. Additionally, FHA loans require PMI for the entire duration of the loan, regardless of your down payment.

VA Mortgages

The third type of mortgage you may consider applying for is a VA loan. These mortgages are backed by the Department of Veterans Affairs. They’re only available for people who:8

        • Served 90 consecutive days or more of active service during wartime
        • Served 181 days or more of active service during peacetime
        • Served 6 years or more in the National Guard or Reserves
        • Are the spouse of a service member who died in the line of duty
        • Are the spouse of a service member who died due to a service-related disability

If you fit into any of these categories, you can apply for a mortgage with a VA lender. There’s no specific credit score requirement for VA mortgages, but most VA lenders require a credit score of around 640 or higher. The average VA loan borrower has a credit score of 722.9

VA loans don’t require a down payment or PMI. They also offer low-interest rates, making them an appealing option for homebuyers who qualify. However, you may have to pay a one-time funding fee, which can range from 1.3% to 3.6% of your total loan amount, depending on your down payment percentage.10

USDA Mortgage

USDA mortgages are made for homebuyers in rural areas. They’re backed by the U.S. Department of Agriculture. In order to be eligible for a USDA loan, you must be willing to buy a home in a rural area. 

There are three types of USDA loans:

        • Direct loans – Created for low-income applicants, direct USDA loans are granted directly by the USDA, rather than a third-party lender. Interest rates on these loans are as low as 1%. 
        • Loan guarantees – USDA loan guarantees are granted by independent lenders and insured by the USDA, much like FHA loans and VA loans. 
        • Home improvement loans and grants – Lastly, the USDA offers loans and grants that rural homeowners can use to upgrade their homes. 

To qualify for a USDA loan, you usually need to have a credit score of 640 or above. If your credit score is above 680, you can enjoy a simpler application process.11

USDA loans usually have low-interest rates and don’t require a down payment. In turn, they make mortgages more accessible for rural homebuyers on a budget. 

What Can You Do if Your Credit Score is Too Low?

If your credit score doesn’t meet the required minimum for your desired mortgage, the best thing you can do is take steps to increase it over the next few months. 

To do so, you should focus on:

  • Paying all of your bills on time
  • Paying down your credit card balances
  • Disputing any errors on your credit reports
  • Holding off from applying for new credit
  • Keeping old credit card accounts open, even after you pay them off

What Other Factors Impact Your Mortgage Eligibility?

Your credit score is just one of the many factors lenders consider when reviewing your mortgage application. They also look at your:

  • Income
  • Employment history
  • Savings
  • Debt-to-income ratio
  • Down payment

If these factors surpass a lender’s requirements, you may have a better chance of getting approved for a mortgage with a low credit score. 

However, it’s important to consider that your low credit score may make it so you only qualify for a higher interest rate on your mortgage. You may also be required to make a larger down payment, so working to improve your credit score may still be beneficial.

How to Leverage Your Credit Score When Looking for a Home

Maybe your credit score is already high enough to qualify for a mortgage with ease. If so, you can leverage your score while you search for your next home. 

Two ways you can use your credit score to strengthen your reputation with sellers is by applying for prequalification and preapproval:

  • Prequalification – Applying for prequalification with a lender lets you see if you meet their basic requirements for a mortgage. The application process is relatively short. You just have to provide some information about your financial background and undergo a soft credit check. It can take as little as an hour to find out if you prequalify after you submit your application.
  • Preapproval – Applying for preapproval lets you know with more accuracy if you qualify for a mortgage from a specific lender. The application process is nearly as rigorous as a regular mortgage application. You’ll have to provide documentation to verify all of your financial and employment information. It can take a few business days to receive your approval response. 

Getting prequalified or preapproved shows sellers that you already meet the credit score requirements for a mortgage, as well as other important criteria. In turn, sellers may be more interested in entertaining your offers

Mortgage Credit Score Requirements: The Bottom Line

If you’re in the market for a new home, having a high credit score can improve your options and set you up for better terms. If your credit score could use some improvement, it’s a good idea to start taking steps to increase it a few months before you plan to apply for a mortgage. 

In the meantime, applying for prequalification or preapproval can help you determine where you stand. 

Explore Certified Credit’s Blog

For more credit-related tips and tricks, check out the Certified Credit blog. We share information about credit score improvement strategies, mortgage fraud prevention, the secondary loan market, and much more. 



 1 Statista. Number of houses sold for cash in the United States from 1988 to 2020.


2 FICO. FICO® Scores Are Used by 90% of Top Lenders.


3 Rocket Mortgage. What Credit Score Do You Need To Buy A House?


4 Business Insider. What Are the Conforming Loan Limits for 2022?


5 Nerd Wallet. The Credit Score Needed to Buy a House.


6. FHA. FHA Loan Requirements. 


7 Nerd Wallet. The Credit Score Needed to Buy a House.


8 Veterans United. VA Loan Eligibility Requirements.


9 Nerd Wallet. The Credit Score Needed to Buy a House.


10 U.S. Department of Veterans Affairs. VA funding fee and loan closing costs.


11 The Mortgage Reports. USDA Loans: Guide To Credit Score Eligibility.