Credit Scores and Mortgages

Your credit score is the single biggest dial on your mortgage rate. A 100-point difference can cost or save you the price of a car over the loan's life. Here is how scoring meets underwriting — and how to improve your position fast.

Minimum scores by program (and real-world minimums)

• Conventional: 620 program minimum; many lenders overlay 640–660. Best pricing at 740–780.
• FHA: 580 for 3.5% down; 500–579 requires 10% down.
• VA: no VA-set minimum; lenders typically want 620–640.
• USDA: 640 is the common automated-approval threshold.
• Jumbo: 700–720+ with strong reserves.

How scores move your rate

Lenders apply loan-level price adjustments in score bands. On a typical conventional loan, moving from the 660–679 band to 740+ can improve pricing by the equivalent of ~0.75–1% of rate — on $340,000, roughly $160–$215 a month, and six figures over a full term (see the interest calculator for the lifetime math). This is why a few months of score work before applying is the highest-paid time in home buying.

Fast, legitimate score improvements

1. Pay down revolving balances. Utilization is a huge scoring factor; getting cards below 30% — and ideally under 10% — of limits can add points within one or two statement cycles.
2. Fix report errors. Pull free reports at AnnualCreditReport.com; dispute mistakes. Errors are common and removals can be quick.
3. Stop applying for other credit in the 6 months before a mortgage; new inquiries and accounts dilute your file.
4. Keep old cards open — closing them shortens history and raises utilization.
5. Become an authorized user on a trusted family member's old, clean, low-utilization card (lenders view this differently by program, but scoring often improves).
6. Ask for 'rapid rescore' through your lender after paying down balances — a legitimate service that updates scores in days during an application.

Mortgage scores are not your app score

Lenders use older FICO versions (2, 4 and 5) from the three bureaus and take the middle score of each borrower (for joint applicants, traditionally the lower middle). These versions weigh mortgage history and installment debt differently from the scores free apps show — your lender's pull is the only one that counts, so treat app scores as a weather forecast, not the temperature. Once your score is in shape, verify the payment it unlocks in the payment calculator and your price range in the affordability calculator, then follow the pre-approval guide.