Most people ask credit score questions in binary: do I qualify or not? The more useful frame is: what does my score cost me, and what can I do about it? Because your credit score doesn't just determine approval — it directly sets your interest rate, which affects every payment you'll make for the next 30 years.
Minimums by loan type
These are the floors. Meeting the minimum doesn't mean you'll get the best terms — it means you're eligible.
- Conventional loans: 620 minimum. Most lenders want 640+ in practice. The best rates typically start around 740+.
- FHA loans: 580 for 3.5% down; 500–579 if you can put 10% down. FHA is more forgiving on score but has its own mortgage insurance costs.
- VA loans: No official minimum from the VA, but most lenders set their own floor at 580–620. With a strong overall profile some lenders go lower.
- Jumbo loans: Typically 700–720 minimum, often 740+ for the best terms. Higher standards because these loans don't conform to government-backed guidelines.
How your score affects your rate — the part most people miss
Approval is a threshold. Pricing is a spectrum. Here's roughly what the same 30-year conventional loan on a $750,000 home looks like across different score ranges:
On a $650,000 loan, a 0.5% rate difference — say 6.875% vs 7.375% — is about $210/month or $75,000 over the life of the loan. A few months improving your credit before buying can pay off significantly.
What's actually in your credit score
Your FICO score (which is what mortgage lenders use — not the "VantageScore" you see in most apps) is calculated from five factors:
Payment history (35%): One late payment — especially recent — can drop your score 60–100 points. If you've had a late payment in the past year, it will show up and it will cost you. Two years of on-time payments after a bad streak goes a long way toward recovery.
Amounts owed / Credit utilization (30%): This is the ratio of your current balances to your credit limits across all revolving accounts. Above 30% utilization starts to hurt; above 50% hurts significantly. If you're sitting on high balances across credit cards, paying them down before applying can be the fastest lever to improve your score.
Length of credit history (15%): The average age of your accounts. Closing old accounts actually hurts you here — even cards you don't use. Keep old accounts open.
New credit (10%): Each hard inquiry (new application for credit) drops your score slightly and stays on record for two years. Multiple mortgage inquiries within a short window (14–45 days) are typically treated as a single inquiry by FICO — so shopping multiple lenders at the same time doesn't hurt the way applying for three credit cards would.
Credit mix (10%): Having a mix of revolving (cards) and installment (auto loan, student loan) accounts helps. This isn't something to engineer specifically — it's just context for why a diverse history tends to score higher.
What not to do between now and closing
This is where buyers get themselves into trouble. Once you're pre-approved, your credit gets re-pulled before closing. Changes during that window can affect your rate or kill the loan entirely.
- 🚫Don't open any new credit accounts. New credit cards, store cards, financing for appliances or furniture — all of these create hard inquiries and can lower your score or raise lender questions. Wait until after closing.
- 🚫Don't close any existing accounts. Closing accounts reduces your available credit and can hurt your utilization ratio. Even cards you never use — keep them open.
- 🚫Don't make any large, unexplained deposits. Lenders will ask about deposits over a certain threshold. Gift funds are fine but need to be documented. Moving money around between accounts creates paperwork. Keep it simple.
- 🚫Don't finance a car or other large purchase. A new auto loan changes your debt-to-income ratio. If it pushes you over the DTI limit, the lender may reduce your loan amount or deny altogether.
- 🚫Don't co-sign on anything. Co-signing means that obligation shows up on your credit. It affects your DTI the same way as if you borrowed it yourself.
- 🚫Don't miss any payments. Obvious, but the period between pre-approval and closing can take 30–60 days. Keep paying everything on time.
Note on checking your own score: Checking your own credit — whether through Credit Karma, your bank app, or annualcreditreport.com — is a soft inquiry and does not affect your score. The mortgage lender's pull is a hard inquiry, but shopping multiple lenders within the same 14–45 day window counts as just one. Don't avoid checking your score out of fear.
How to check your credit before you apply
A few options:
- annualcreditreport.com — the official federally-mandated free report from all three bureaus (Equifax, Experian, TransUnion). Doesn't always show your score, but shows the full report so you can spot errors.
- Your credit card app — many major cards (Chase, Amex, Discover, Capital One) now show your FICO score for free monthly.
- Let me pull it — when you're ready to get a pre-approval, I pull a tri-merge mortgage credit report that shows all three scores. I'll walk through it with you.
If you spot errors on your report, dispute them directly with the bureau. Errors — especially reporting an account as delinquent when it wasn't — can be fixed and can meaningfully move your score.
Not sure where your credit stands?
I'll pull your credit and walk through the report with you — what it means for the programs you qualify for, and whether there's anything worth improving before you apply. No pressure, no commitment required.
Get in touch →Educational purposes only. Loan programs vary. Not legal, tax, or financial advice. Contact me for individualized guidance.
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