You've probably heard that you need "good credit" to buy a house. But what does that actually mean — and what's the minimum number that will get you through the door? Here's the real breakdown.
The Quick Answer by Loan Type
| Loan Type | Minimum Score | Best Rate Score |
|---|---|---|
| Conventional (Fannie/Freddie) | 620 | 740+ |
| FHA Loan | 580 (3.5% down) / 500 (10% down) | 680+ |
| VA Loan | No official minimum (lenders often require 620) | 720+ |
| USDA Loan | 640 | 680+ |
| Jumbo Loan | 700–720 | 760+ |
Bottom line: You can get into a home with a score as low as 500 (with FHA), but your interest rate, down payment, and monthly payment will be much higher. Every 20 points on your score can shift your rate by 0.25–0.5%.
How Much Does Your Score Actually Cost You?
Let's use a $300,000 home with 10% down ($270,000 loan) to show what different credit scores mean in dollars:
| Credit Score | Rate (Approx) | Monthly Payment | Total Interest (30 yr) |
|---|---|---|---|
| 760+ | 6.6% | $1,726 | $151,360 |
| 720–759 | 6.8% | $1,763 | $164,680 |
| 680–719 | 7.1% | $1,815 | $183,400 |
| 640–679 | 7.6% | $1,902 | $214,720 |
| 620–639 | 8.1% | $1,993 | $247,480 |
Going from 620 to 760 saves you roughly $267 per month and nearly $96,000 over the life of the loan. That's real money.
What Makes Up Your Credit Score?
FICO scores (the kind lenders use) are calculated from five factors:
- Payment history (35%): The biggest factor. One 30-day late payment can drop your score 50–100 points.
- Credit utilization (30%): How much of your available revolving credit you're using. Under 30% is good; under 10% is best.
- Length of credit history (15%): Older accounts help. Don't close your oldest card.
- Credit mix (10%): Having both revolving (cards) and installment (auto, student) credit helps.
- New credit (10%): Each hard inquiry drops your score a few points temporarily.
How to Improve Your Score Before Applying
If you're 6–18 months away from buying, here's where to focus first:
- Pay down credit card balances. Getting utilization under 10% is the fastest way to boost your score. If you have a $10,000 limit and owe $4,000, pay it down to under $1,000.
- Don't open new credit. Every application creates a hard inquiry. Hold off until after closing.
- Dispute errors on your report. About 1 in 5 credit reports has a mistake. Get your free reports at AnnualCreditReport.com and dispute anything wrong — errors can be fixed in 30 days.
- Become an authorized user. Ask a family member with excellent credit to add you to their oldest, lowest-utilization card. The account history gets added to your report.
- Don't close old accounts. Even unused cards add to your average account age and total available credit.
Does Your Score Have to Be Perfect?
No. Lenders see thousands of loans at every score level. At 660 you can absolutely get a mortgage — the rate just won't be as good. If you're buying now out of necessity (rent is high, you found the right house), it can make more sense to buy at a slightly higher rate and refinance when your score improves.
The break-even on a refinance is typically 18–36 months, so if you plan to stay in the home, buying now at 7.5% and refinancing to 6.5% in two years is a perfectly valid strategy.
The Bottom Line
Aim for 740+ if you want the best rates. Don't wait for 850 — that's the score equivalent of waiting for the "perfect" time to buy. Focus on paying down cards, avoiding new inquiries, and disputing errors. Six months of focused effort can realistically move a 640 to a 700+.
Once your score is where you want it, use our mortgage calculator to see exactly what your monthly payment will be.