What Credit Score Do You Need to Buy a House? (2026 Guide)
By Wealthvieu · Updated
Your credit score is one of the most important factors in buying a home — it determines whether you qualify, what interest rate you get, and how much the loan costs over time.
Table of Contents
Minimum Credit Score by Loan Type
Loan Type
Minimum Score
Down Payment
Best For
FHA
500 (10% down) / 580 (3.5% down)
3.5-10%
First-time buyers, lower credit
Conventional (Fannie/Freddie)
620
3-20%
Good credit, lower PMI
VA
No minimum (most lenders: 620)
0%
Veterans, active military
USDA
No minimum (most lenders: 640)
0%
Rural areas, low-moderate income
Jumbo
700-720
10-20%
Loans above $806,500
How Credit Score Affects Your Interest Rate
Credit Score
Estimated Rate (30yr fixed)
Monthly Payment ($350K loan)
Total Interest (30yr)
760+
6.25%
$2,155
$426,000
740-759
6.375%
$2,184
$436,000
720-739
6.50%
$2,212
$447,000
700-719
6.75%
$2,270
$467,000
680-699
7.00%
$2,329
$488,000
660-679
7.375%
$2,414
$519,000
620-659
7.75%
$2,502
$551,000
A 760 score vs. 620 score = $347/month more on a $350K loan — $125,000 over 30 years.
Credit Score Ranges and What They Mean
Score Range
Rating
Mortgage Eligibility
300-579
Poor
FHA only (10% down required)
580-619
Fair
FHA (3.5% down), limited conventional
620-679
Good
Conventional, FHA, VA, USDA
680-739
Very good
All loan types, good rates
740-799
Excellent
Best rates available
800-850
Exceptional
Best rates (same as 740+)
PMI Costs by Credit Score
Private mortgage insurance (required with < 20% down on conventional loans) varies by score:
Credit Score
PMI Rate (Annual)
Monthly PMI on $350K Loan
Annual Cost
760+
0.25-0.40%
$73-$117
$875-$1,400
740-759
0.30-0.50%
$88-$146
$1,050-$1,750
720-739
0.40-0.65%
$117-$190
$1,400-$2,275
700-719
0.55-0.80%
$160-$233
$1,925-$2,800
680-699
0.70-1.00%
$204-$292
$2,450-$3,500
660-679
0.90-1.20%
$263-$350
$3,150-$4,200
620-659
1.10-1.50%
$321-$438
$3,850-$5,250
FHA vs. Conventional: Which Is Better for Your Score?
Credit Score
Better Loan Type
Why
500-579
FHA (only option)
Conventional requires 620+
580-619
FHA
Lower rates, 3.5% down
620-659
FHA (usually)
Better rates than conventional at this score
660-699
Compare both
FHA has lifetime MIP; conventional PMI drops at 80% LTV
700-739
Conventional
Lower PMI, PMI cancellation at 80%
740+
Conventional
Best rates, lowest PMI
FHA trade-off: Lower credit requirements but mortgage insurance lasts the entire loan (unless you refinance). Conventional PMI drops off at 80% LTV.
How to Improve Your Score Before Buying
Action
Potential Score Increase
Timeline
Pay down credit cards below 30% utilization
+20-50 points
30-60 days
Pay down to below 10% utilization
+30-65 points
30-60 days
Become an authorized user on old account
+15-30 points
30-60 days
Dispute and remove errors
+25-100 points
30-90 days
Pay off collections (pay-for-delete)
+25-75 points
30-90 days
Don’t apply for new credit
Prevents drops
Ongoing (6-12 months)
Let negative marks age
+5-10 points/year
12-24 months
Timeline: Getting Mortgage-Ready
Current Score
Target
Steps
Estimated Timeline
500-550
580 (FHA)
Pay collections, lower utilization
3-6 months
550-600
620 (conventional)
Pay down balances, dispute errors
3-6 months
600-660
700 (better rates)
Lower utilization, age accounts
6-12 months
660-720
740 (best rates)
Fine-tune utilization, patience
3-12 months
What Lenders Actually Look At
Factor
Weight
Details
Payment history
35%
On-time payments on all accounts
Credit utilization
30%
Balances vs. limits on revolving credit
Length of credit history
15%
Age of oldest account and average age
Credit mix
10%
Installment + revolving accounts
New credit inquiries
10%
Hard pulls in last 12 months
Mortgage shopping tip: Multiple mortgage inquiries within 14-45 days count as one hard pull on your credit score.
Key Takeaways
Minimum score: 500 (FHA, 10% down), 580 (FHA, 3.5% down), 620 (conventional) — VA and USDA technically have no minimums
A 760+ score gets the best rates — saving $125,000+ over 30 years vs. a 620 score
The biggest rate jumps happen below 680 — focus on getting above this threshold
FHA is better below 700; conventional is better above 700 due to PMI differences
You can improve your score 50-100 points in 3-6 months by paying down balances and fixing errors
