Your credit score is one of the first things a lender looks at — and it affects not just whether you qualify, but what interest rate you get. Here's a breakdown by loan type.
Minimum scores by loan type
- Conventional: Requirements depend on lender and underwriting path. Fannie Mae DU removed its fixed minimum score effective November 15, 2025; manual underwriting and other investors differ. No score, including 740, guarantees the best rate.
- FHA purchase financing: For scored borrowers, the minimum decision credit score generally permits up to 96.5% LTV at 580 or above, or 90% LTV at 500–579. These are program limits, not approval: lender, credit-history, income, property and other requirements apply; nontraditional-credit and special transactions need separate review.
- VA: VA does not set a program minimum score; lenders may apply their own credit requirements. Eligibility does not guarantee approval.
- USDA Guaranteed: Credit and underwriting requirements depend on the application and lender. A score alone does not establish eligibility or approval.
How your score affects your rate
Credit can affect pricing, but the effect depends on the scoring model, program, loan-to-value ratio and lender’s actual offer. A twenty-point change does not imply a fixed rate change or prove that an offer is better; compare equivalent quotes.
What goes into your credit score
- Payment history (about 35% of a typical FICO score): Late-payment effects depend on the credit file and scoring model; no fixed point loss applies to everyone.
- Amounts owed (about 30%): Includes utilization and other debt measures, not utilization alone. Lower revolving utilization can help, but no threshold guarantees a score.
- Length of credit history (about 15% of a typical FICO score): Includes ages of accounts and other history measures. Closing an account can affect different measures; no instruction fits every credit file.
- Credit mix (about 10% of a typical FICO score): Includes types of accounts. A new debt is not necessary to obtain a good score and does not guarantee a point increase.
- New credit (about 10%): Includes recent accounts and inquiries. These category weights describe a typical FICO score and vary by person; other models differ.
How to improve your score before applying
Check your credit reports and dispute documented errors. Payment history, balances and new accounts can affect scores, but the result depends on the file and model. Before changing accounts or paying a collection solely for mortgage eligibility, ask how the applicable program and lender treat it; no particular score increase is guaranteed.
These are general guidelines. Credit score requirements can vary by lender. Speak with a licensed loan officer for guidance specific to your situation.