At a Glance

If you’re in the market for a mortgage, you’ll want to make sure you have a solid credit score. Generally, most lenders require a minimum credit score of 620 to qualify for a mortgage. This can assure the lender that you’re likely to pay them back on time and as agreed. That said, a higher credit score can be beneficial — typically, scores of 740 or higher can qualify you for some of the best rates and more favorable terms. Thus, focusing on improving your credit score before applying for a mortgage often pays off, as this could save you money over the loan.

In this article, you’ll learn:

Credit score needed for different types of mortgages

The average credit score needed for a mortgage is usually 620 or higher. Lenders may require higher scores to qualify for the most competitive mortgage rates. Scores of 700 or above are typically considered excellent, while scores between 600 and 699 are considered good.

1. Conventional loan

Obtaining a conventional loan mortgage can be a difficult process, requiring meeting stringent criteria. One of the key elements to getting approved is having an excellent credit score. Generally speaking, a credit score of at least 620 is needed to secure a conventional mortgage, although it can vary by lender, and the interest rate may differ for different loan amounts and down payment amounts. Those with higher credit scores have an advantage as they are more likely to be approved and also get better terms on their loans.

2. FHA loan

Obtaining a Federal Housing Administration (FHA) loan can be an attractive financing option for many prospective home buyers. Generally speaking, an FHA loan requires a minimum credit score of 580 or higher; borrowers with scores between 500 and 579 will likely need to make down payments of at least 10%, while those with scores below 500 may be ineligible for FHA financing altogether. The exact amount of the down payment and requirements may also vary depending on your lender, so it is important to do some research when making your decision.

3. VA loan

VA loans exist to help make the purchase of a home easier for veterans. Generally, borrowers with a minimum FICO score of 640 are eligible for VA funding. They may still be required to meet other requirements, such as proving sufficient income and having a debt-to-income ratio below 43%. In addition, guidelines state a two-year history of steady employment and dwelling in a safe living environment must also be shown. With these qualifications in mind, veterans should know they will have an advantage if their credit score falls within the range recommended as they seek to purchase their dream home.

4. USDA loan

You should have a minimum credit score of 620 to qualify for a USDA loan. However, this can vary by lender, and other factors may be considered during the assessment process. It’s vital that you communicate with the lender regarding their specific requirements upfront before formally applying to find out just how competitive your eligibility will be. A good credit score is not only essential for getting accepted for a loan but also for securing an affordable rate on your loan over time.

5. Jumbo loan

Applying for a jumbo loan requires careful consideration of one’s financial circumstances, as lenders typically accept only those with a higher credit score. Your credit score should be at least 700 or above if you wish to qualify for a jumbo loan. However, depending on the lender, your income level, and your employment stability, it might be possible to obtain a jumbo loan with a credit score as low as 680.

Other factors considered for a mortgage

Other factors that may be considered when applying for a mortgage include income, employment history, debt-to-income ratio, and the amount of the down payment. Lenders may also look at your ability to pay closing costs, homeowners insurance, and your credit history. They may also assess whether you have enough cash reserves to cover at least two months of mortgage payments. Additionally, lenders will require an appraisal to determine how much the property is worth.

1. Debt-to-income ratio

This gives the lender a good sense of your financial health and shows how much of your money is going toward debt payments. Your DTI is calculated by dividing all monthly debt payments by gross monthly income, so you must have an accurate understanding of both your income and debts when applying for a mortgage. This information should always be considered when determining what kind of loan amount and terms you qualify for.

Related: How Much Debt Is Too Much Debt?

2. Employment history

A steady job and a consistent salary will go a long way to ensuring the lender you can make your monthly payments and pay off the entire loan amount in due time. Established career history can also be extremely helpful to lenders when proving stability is important. Having multiple years of steady employment with no gaps may further cement the trust between lender and borrower, which is highly desirable for any financial transaction. In sum, employment history plays an important role in determining whether an individual’s loan application will be approved.

3. Down payment

A larger down payment usually indicates to the lender that the borrower is more financially secure and could be more likely to honor their loan agreement. The size of the down payment can also help reduce the amount of interest accruing on the loan over time which could lead to lower total payments over the life of the loan. In some cases, lenders may even offer incentives such as reduced interest rates or assistance with other closing costs associated with getting a mortgage when borrowers are able to make a substantial down payment on their home loans.

4. Home condition and value

When applying for a mortgage loan, lenders must ensure that the asset used as collateral has enough value to cover the loan in case of default. Many homeowners looking for a mortgage may not be aware that lenders will indeed consider both the condition and value of their home when determining eligibility. Lenders typically inspect the exterior and interior of homes, noting any evidence of deferred maintenance or structural issues. They’ll also consider the real estate market within your geographic area and approximate your home’s market value through a property appraisal system. Ultimately, this helps lenders make an informed decision when it comes to approving your loan amount, interest rate, and other terms associated with the mortgage.


Mortgage lenders typically use your FICO score to determine your creditworthiness when you apply for a mortgage. The Fair Isaac Corporation provides FICO scores, and they are based on credit reports from the three major credit bureaus: Experian, Equifax, and TransUnion.

Your FICO score is a number between 300 and 850, based on factors such as your payment history, your credit utilization, the length of your credit history, and the types of credit accounts you have. Mortgage lenders will use your FICO score to help determine whether you qualify for a mortgage, as well as the interest rate and terms of the loan.

Different lenders may have different minimum FICO score requirements for their mortgage products, but generally, a FICO score of 620 or higher is considered a good credit score for a mortgage. However, a higher credit score will generally result in better loan terms, including lower interest rates and fees. Therefore, it’s a good idea to work on improving your credit score before applying for a mortgage if possible.

The timeline for mortgage approval can vary depending on several factors, including the type of mortgage, the lender’s specific processes, and your own financial situation. Generally, the mortgage approval process can take a few days to several weeks.

Here’s a rough timeline of the mortgage approval process:

  1. Pre-approval: This is the initial stage, where you provide your financial information to a lender and receive a pre-approval letter. This stage can take as little as one business day.
  2. Application: Once you find a home and submit a formal application for a mortgage, the lender will begin reviewing your financial information and verifying your employment and income. This stage can take anywhere from a few days to a week.
  3. Underwriting: This is the process where the lender reviews all of the information and documents related to your application and determines whether you meet their lending criteria. This stage can take several days to a few weeks, depending on the lender’s workload and the complexity of your application.
  4. Closing: If you’re approved for the mortgage, you’ll need to schedule a closing date, where you sign all the necessary paperwork and finalize the loan. This stage can take anywhere from a few days to a few weeks, depending on how quickly all parties can coordinate the necessary steps.