Credit Scores & Your Mortgage
Your credit score is one of the biggest factors in the interest rate you're offered. Understanding it puts you in control.
In this guide
What score do you need?
General starting points (lenders vary):
- Conventional: typically 620+, best pricing at ~740+.
- FHA: 580+ for 3.5% down (500–579 may need 10% down).
- VA: no VA-set minimum, but lenders often want ~600–620+.
What moves your score
Payment history and credit utilization (how much of your limits you use) are the heaviest factors. Keeping balances low and never missing payments are the two highest-impact habits.
How to improve before buying
Pay every bill on time, pay down revolving balances, avoid opening new accounts right before applying, and check your reports for errors at AnnualCreditReport.com.
How your score is actually calculated
Most mortgage lenders use FICO scores, which are built from five ingredients. Knowing their relative weight tells you where to focus:
- Payment history (~35%) — whether you pay on time. The single biggest factor, and the reason one missed payment can sting.
- Amounts owed / utilization (~30%) — how much of your available credit you're using. Keeping card balances well under 30% of their limits helps.
- Length of credit history (~15%) — older accounts help, which is why closing an old card can backfire.
- Credit mix (~10%) — a blend of cards and installment loans.
- New credit (~10%) — a flurry of new applications can ding your score temporarily.
Checking your reports for free — and fixing errors
You are entitled to free credit reports from each of the three major bureaus at AnnualCreditReport.com, the only federally authorized source. Review all three, because they don't always match. Errors are common — an account that isn't yours, a paid balance still showing as owed, a wrong late mark — and each bureau has a formal dispute process to correct them. Cleaning up a mistake before you apply can move your rate.
Rate-shopping without hurting your score
Many buyers worry that comparing lenders will damage their credit. In practice, the scoring models treat multiple mortgage inquiries made within a short window — often 14 to 45 days — as a single event, precisely so you can shop for the best offer. Do your rate shopping in a focused stretch rather than spread out over months, and the impact stays minimal.
Common credit myths
- Myth: checking your own credit lowers your score. Checking your own report is a “soft” pull and never hurts.
- Myth: you need a perfect score. Solid, not flawless, credit qualifies for most loans; the very best pricing tiers just start around the mid-700s.
- Myth: closing old cards helps. It can shorten your history and raise your utilization, nudging the score down.
- Myth: carrying a balance builds credit. Paying in full each month builds credit just as well and avoids interest.