The credit score needed for a home loan is not one number. FHA guidelines allow scores as low as 500 with 10% down, conventional loans generally start at 620, and the best pricing tends to begin near 740. The minimum only decides whether a program is open to you. Your score then sets the rate, the mortgage insurance cost, and the total monthly payment. Below are the minimums by program, why your application score may differ from the one on your phone, and what a 640 versus a 760 costs on the same house.
By Duane Buziak, NMLS #1110647
Minimum Credit Scores by Loan Program
Each program has its own floor, and the mortgage companies and investors behind it often add stricter rules of their own. Those extra rules are called overlays, and they explain why two companies can give you different answers on the same file.
- Conventional (Fannie Mae and Freddie Mac): 620 is the long-standing minimum, and pricing improves in tiers, with the best tiers starting near 740. Fannie Mae has been revising how its automated underwriting treats the 620 floor, so check the current Fannie Mae Selling Guide eligibility matrix rather than relying on a number you saw last year.
- FHA: Under HUD Handbook 4000.1, a 580 score qualifies for the 3.5% minimum down payment. Scores from 500 to 579 require 10% down. Many companies set a higher floor, commonly 600 to 640, so the HUD minimum is not always the number you will be offered.
- VA: The VA publishes no minimum credit score. The investors who fund VA loans set their own, and they vary widely. Duane Buziak can match a file to programs that accept scores as low as 500 FICO, depending on the investor and the full file. Availability changes, so confirm it for your situation.
- USDA: There is no fixed federal minimum. A score of about 640 is typically what allows automated approval. Lower scores can still be considered through manual underwriting with stronger compensating factors. Check the current guidance in the USDA Single Family Housing Guaranteed Loan Program materials.
Approval at the minimum is not the same as good pricing. A borrower at 580 on an FHA loan is approved on the program’s terms, but will usually pay more than a borrower at 740 on the same program. Credit is only one factor. Debt-to-income ratio, reserves, down payment, and occupancy also shape the decision.
Because overlays differ so much, the better question is which program and which investor fit your score. That is where a broker’s access to many options matters, and it comes up again in the comparison section below.
Why the Score on Your Application May Differ from the One You Check
Mortgage underwriting has historically relied on older versions of the FICO model, often called Classic FICO (versions 2, 4, and 5, one for each credit bureau). Free banking apps and card dashboards typically show a VantageScore or a newer FICO version. The same credit file can produce scores 20 or more points apart across these models, which is why your app can say 710 while the mortgage score comes back at 688.
VantageScore 4.0 is a scoring model built by the three credit bureaus. In 2025, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac could accept it as an alternative to Classic FICO for conventional loans. Implementation has been phased, and the status of the rollout, including which systems and loan types accept it, keeps changing. As of October 2026, verify the current position with FHFA or ask your broker. Better Mortgage Rates by Duane Buziak supports Vantage Score 4.0 where an investor accepts it.
Which score actually counts
For conventional loans, underwriters pull scores from all three bureaus and use the middle score. With scores of 701, 688, and 672, the file is scored at 688. With two borrowers, each borrower’s middle score is identified, and the lower of the two generally drives the file. A co-borrower with a weaker score can therefore pull down pricing for both of you. FHA and VA approaches differ in the details, so ask how your specific program treats a joint file.
The mistake that costs people approvals
Scores get re-checked before closing. Opening a new card, financing furniture, or closing an old account to tidy up can lower your score or change your debt ratios between pre-approval and closing. Closing a card shrinks your total available credit and can raise your utilization. Keep your accounts as they are until the keys are in your hand.
How Credit Score Changes Your Rate and Your PMI
Conventional pricing runs through loan-level price adjustments (LLPAs). These are fees Fannie Mae and Freddie Mac assess, based on credit score and loan-to-value (LTV) ratio, which is your loan balance divided by the home’s value. The adjustments are built into your rate or paid as points. The grid is published in the Fannie Mae LLPA matrix, and it changes from time to time, so read the version dated today rather than a cached one. The pattern is stable, though: a 680 score at 95% LTV carries a noticeably larger adjustment than a 760 at the same LTV, and that gap shows up as a higher rate.
Private mortgage insurance (PMI) is required on conventional loans with less than 20% down. Its cost depends on score and down payment, and insurers publish their rate cards. MGIC, for example, posts published rate information showing how premiums fall as scores rise. The worksheet in the next section uses clearly labeled assumptions, so look up the card for your own scenario.
PMI removal math
Under the Homeowners Protection Act, you can request PMI cancellation when your balance reaches 80% of the home’s original value, and it must terminate automatically at 78% if you are current on payments. The CFPB explains the rules, including payment-history requirements.
Take a hypothetical $350,000 home with 5% down ($17,500), a $332,500 loan, and a 6.00% rate on a 30-year term. The principal and interest payment is about $1,993.50.
- 80% of $350,000 is $280,000. The scheduled balance falls to that level after about 118 months, near the 10-year mark.
- 78% is $273,000. Automatic termination arrives around month 129.
- Requesting removal at month 118 instead of waiting 11 more months saves roughly $4,300 if your PMI is about $388 per month.
Extra principal payments or a documented rise in value can shorten this timeline, though servicers have their own appraisal rules for value-based removal.
Total Cost of Ownership Worksheet: Same Home, Different Scores
A payment quote hides most of the difference. Here is the same $350,000 home with 5% down, a $332,500 loan, and a 30-year term. The rates are hypothetical, chosen to show how pricing can differ by score. They are not quotes and not a promise of any rate.
Assumptions:
- Property tax: $0.85 per $100 of assessed value, used here as an illustration for Henrico County, Virginia, which works out to $2,975 per year. The county sets and changes this rate, so as of October 2026 confirm the current figure on the Henrico County real estate assessments page before relying on it. Your own jurisdiction’s rate will differ.
- Homeowners insurance: an estimated $1,800 per year ($150 per month). Real premiums vary by property, location, and carrier.
- PMI: assumed annual premiums of 1.40% of the loan for the 640 score and 0.45% for the 760 score, purely for illustration. Your actual premium comes from the insurer’s rate card.
| Monthly cost item | 640 score (6.75% hypothetical) | 760 score (6.00% hypothetical) |
|---|---|---|
| Principal and interest | $2,157 | $1,994 |
| Property tax ($0.85 per $100) | $248 | $248 |
| Homeowners insurance (estimate) | $150 | $150 |
| PMI (assumed) | $388 | $125 |
| Total monthly | $2,943 | $2,517 |
| Five-year total (60 months) | $176,550 | $150,967 |
The gap is about $426 per month, or roughly $25,600 over five years. Principal and interest account for about $163 of it, and PMI accounts for most of the rest. Notice what the interest rate alone would have shown you: well under half of the real difference. That is why a worksheet beats a rate quote.
Broker vs. Bank: Where You Can Shop with a Lower Score
A single bank or direct mortgage company offers its own programs under its own overlays. If your score falls below its internal floor, the answer is simply no. A broker such as Duane Buziak submits one file across hundreds of wholesale options at once, so a file that one investor declines can fit another’s guidelines. The trade-off is that you rely on the broker to match the file well, so ask which options were considered and why one was chosen.
The table below is a general comparison based on how each company describes itself publicly. Details change, so as of October 2026 confirm each point on the company’s own site.
| Company | Channel | Soft-pull pre-qualification | Program range |
|---|---|---|---|
| Duane Buziak (Better Mortgage Rates) | Broker, shops hundreds of wholesale options | Yes, NoTouch Credit Pull | Conventional, FHA, VA, USDA, cash-out refinance to 90%, and others; reverse mortgages by referral only |
| Rocket | Direct, online-first | Confirm on company site | Broad, including conventional, FHA, VA, and USDA |
| Movement | Direct mortgage company | Confirm on company site | Broad, including conventional and government-backed loans |
| Veterans United | Direct, with a strong VA focus | Confirm on company site | VA-centered, plus other common programs |
| CF Mortgage Corp | Direct mortgage company | Confirm on company site | Confirm current programs on company site |
| NFM Lending | Direct mortgage company | Confirm on company site | Confirm current programs on company site |
Each of these companies can be a good fit for the right borrower. A veteran who wants a VA-specialized team may value that focus. A borrower with a mid-600s score and a thin down payment may benefit more from comparing many investors at once. Other providers exist as well, so compare at least two or three offers by the same worksheet, with taxes, insurance, and PMI included.
Check Where You Stand Without a Hard Inquiry
A hard inquiry happens when a company pulls your credit to make a lending decision, and it can lower your score by a few points. A soft inquiry is a review for information or pre-screening, and it does not affect your score. A soft credit pull mortgage review lets you see your options before you commit to anything.
Better Mortgage Rates by Duane Buziak uses NoTouch Credit Pull, a no credit hit mortgage application step. It gives you a no hard inquiry mortgage pre approval view of which programs fit your file. A hard pull comes later, once you choose to move forward with a specific loan.
Steps that improve your position
- Pull your free reports at annualcreditreport.com, the federally authorized source, and read all three for errors.
- Dispute mistakes through the bureaus. The CFPB’s credit report guidance explains your rights and the dispute process.
- Lower revolving balances below roughly 30% of each card’s limit, and lower still if you can. Utilization is one of the fastest levers.
- Avoid new accounts and leave old ones open until after closing.
Once you do move to a hard pull, shop within a short window. Scoring models generally treat multiple mortgage inquiries in a short period as a single inquiry, but the window varies from 14 to 45 days depending on the model. Keep your applications within 14 days to be safe, and ask which model applies to your loan.
A Minimum Score Is a Starting Point, Not a Verdict
Clearing a program’s floor opens a door, and your score then shapes everything on the other side of it. A file at 600 may have a workable path through FHA or a matched investor, and a file at 700 may still gain real money from a few weeks of preparation. Start with the worksheet, not the minimum.
The simplest next step is a mortgage pre approval without hard pull. Ready to find your best mortgage rate from hundreds of wholesale options without impacting your credit score? Get your free no-touch pre-qualification today and discover exactly what you qualify for with personalized guidance from a trusted mortgage expert at Better Mortgage Rates by Duane Buziak.
