How Your Credit Score Affects Your Mortgage Rate and Approval

Credit Score Tiers and Mortgage Rates

Mortgage lenders use FICO scores, typically pulling all three bureaus (Equifax, Experian, TransUnion) and using the middle score. Here is how scores typically affect rates in 2026:

• 760+: Best available rates (baseline)
• 740-759: +0.125% above baseline
• 720-739: +0.25% above baseline
• 700-719: +0.375% above baseline
• 680-699: +0.50% above baseline
• 660-679: +0.75% above baseline
• 640-659: +1.00% above baseline
• 620-639: +1.50% above baseline

On a $350,000 loan, the difference between a 760 score and a 640 score can be $300-$500/month and over $100,000 in total interest over 30 years.

How to Improve Your Score Before Applying

Pay down credit card balances: Credit utilization (balance vs. limit) is the fastest lever. Getting below 30% helps; below 10% is ideal. Paying down $5,000 in credit card debt can boost your score 20-40 points within a month.

Do not open or close accounts: New accounts lower your average account age. Closing accounts reduces available credit, increasing utilization.

Dispute errors: Check all three credit reports for inaccuracies. Errors affecting 25%+ of reports are common. Dispute directly with bureaus online for fastest resolution.

Become an authorized user: Being added to a family member's old, high-limit, low-balance card can quickly boost your score.

Minimum Scores by Loan Type

Conventional: 620 (3% down) or 680 (best terms). FHA: 580 (3.5% down) or 500 (10% down). VA: No official minimum, but 580-620 typical. USDA: 640 most lenders. Jumbo: 700+ (720+ preferred).