US Credit Score Guide: FICO Scores & Mortgage Qualification 2025
Complete guide to US credit scores including FICO score ranges, how credit affects mortgage rates, and tips to improve your credit for better loan terms.
Understanding US Credit Scores for Mortgages
Your credit score is one of the most important factors in mortgage approval and interest rates. Understanding how credit scores work helps you secure the best loan terms possible.
FICO Score Ranges
Exceptional (800-850): Best rates, easiest approval
Very Good (740-799): Excellent rates, easy approval
Good (670-739): Good rates, likely approval
Fair (580-669): Higher rates, may need larger down payment
Poor (300-579): Difficult approval, very high rates or FHA only
Credit Score Impact on Mortgage Rates
760+ Credit Score: Best available rates
740-759: Very good rates, minimal difference
720-739: Good rates, slight increase
680-719: Higher rates, 0.25-0.5% increase
640-679: Significantly higher rates, 0.5-1% increase
Below 640: Much higher rates or denial
Minimum Credit Scores by Loan Type
Conventional Loans: 620 minimum, 740+ for best rates
FHA Loans: 500 minimum (with 10% down), 580+ for 3.5% down
VA Loans: No minimum (lender-dependent, typically 620+)
USDA Loans: 640+ typically required
Jumbo Loans: 700+ typically required
Factors Affecting Credit Score
Payment History (35%): On-time payments are crucial
Credit Utilization (30%): Keep balances below 30% of limits
Credit History Length (15%): Older accounts help score
Credit Mix (10%): Different types of credit (cards, loans, etc.)
New Credit (10%): Recent applications can hurt score
Improving Your Credit Score
Pay Bills On Time: Set up automatic payments
Reduce Credit Card Balances: Pay down high balances first
Don't Close Old Accounts: Keep credit history length
Limit New Applications: Avoid applying for credit before mortgage
Check Credit Reports: Dispute any errors
Become Authorized User: On someone else's good account
Credit Score Requirements by Down Payment
20% Down Payment: 620+ credit score
10-19% Down Payment: 640+ credit score
5-9% Down Payment: 680+ credit score
3-4% Down Payment: 700+ credit score
0-2% Down Payment: 740+ credit score
Credit Score and PMI
760+ Credit Score: Lowest PMI rates
740-759: Good PMI rates
720-739: Average PMI rates
680-719: Higher PMI rates
Below 680: Highest PMI rates or denial
Credit Score Myths
Myth: Checking your score hurts it
Reality: Soft inquiries don't affect score
Myth: Closing credit cards helps score
Reality: Closing cards can hurt utilization ratio
Myth: Carrying small balances helps score
Reality: Paying off balances completely is better
Myth: Income affects credit score
Reality: Income is not part of credit score calculation
Credit Score Timeline
Immediate Impact: Payment history updates
1-2 Months: Credit utilization changes
3-6 Months: New account impact
7+ Years: Negative items fall off
Pre-Mortgage Credit Checklist
- Check all three credit reports (Experian, Equifax, TransUnion)
- Dispute any errors immediately
- Pay down credit card balances
- Avoid new credit applications
- Don't close old accounts
- Set up automatic payments
- Monitor credit regularly
Calculate Your Mortgage with Credit Score Impact
Use our calculator to see how different credit scores affect:
- Interest rates and monthly payments
- PMI requirements and costs
- Total interest over loan life
- Required down payment amounts
- Loan qualification amounts
Credit Score Resources
- AnnualCreditReport.com - Free credit reports
- Credit Karma - Free credit monitoring
- CreditWise - Capital One's free service
- FICO Score - Official FICO scores
- Credit counseling services