Credit score requirements depend on the type of loan you're pursuing. Most conventional mortgages look for 620 or above, while government-backed programs can go lower — sometimes significantly. The higher your score, the more options you'll have and the better the terms you'll typically qualify for.
Why Your Score Matters to Lenders
A credit score is a summary of how reliably you've managed debt over time. Lenders use it to gauge risk. A higher score suggests you're likely to make payments consistently, which makes lenders more willing to offer favorable rates. A lower score doesn't automatically disqualify you, but it often means stricter terms or a higher interest rate.
What Different Score Ranges Generally Mean
- 740 and above — typically qualifies for the best rates on conventional loans
- 680–739 — still strong; good options across most loan types
- 620–679 — conventional financing is often possible; some rate adjustment may apply
- 580–619 — FHA loans are typically available with a 3.5% down payment
- 500–579 — FHA loans may still be an option, usually with a 10% down payment
- Below 500 — most programs have limited availability; building credit first is usually the right move
These are general guidelines. Individual lenders have their own overlays, and your full financial picture matters too.
FHA Loans as a Lower-Score Pathway
The FHA loan program, backed by the Federal Housing Administration, is specifically designed to make homeownership accessible to buyers with less-than-perfect credit or smaller down payments. If you're in the 580–620 range, it's worth understanding how FHA works — the trade-off is a mortgage insurance premium that adds to your monthly cost, but it can be a solid path into ownership.
Building Your Score Before You Apply
If your score needs a boost, a few habits carry the most weight: paying every bill on time, keeping credit card balances well below your limits, and avoiding opening new credit accounts right before you apply. Progress takes time, but even a few months of consistent behavior can move your score meaningfully. Talk to a lender early — they can tell you exactly where you stand and what would help most.
Curious how your credit score affects your options? Explore loan programs with First Look Home Loans and we'll help you find the right fit.
