Credit & Qualifying
Your credit score is one of the most powerful numbers in your financial life — and nowhere does it matter more than when you're applying for a mortgage. A difference of 60-80 points can mean thousands of dollars in extra interest over the life of your loan. Here's exactly where you stand and what you can do about it.
Quick answer: A score of 740 or above is considered very good and will qualify you for the best mortgage rates. A score of 700–739 is good. Below 620 and most conventional loans are out of reach — but FHA loans are still available from 580.
Credit scores in the US range from 300 to 850. Here's how lenders view each range in 2025:
| Score Range | Rating | What it means for mortgages |
|---|---|---|
| 800 – 850 | Exceptional | Best rates available, easiest approval, lowest fees |
| 740 – 799 | Very Good | Qualifies for top-tier rates, minimal conditions |
| 700 – 739 | Good | Solid approval odds, slightly higher rate than top tier |
| 670 – 699 | Fair | Conventional loans available, rate may be 0.5%+ higher |
| 620 – 669 | Below Average | Limited conventional options, FHA loans available |
| 580 – 619 | Poor | FHA only with 3.5% down, higher insurance costs |
| Below 580 | Very Poor | Most lenders won't approve, significant work needed |
This is where it gets real. On a $320,000 30-year mortgage, here's roughly what different credit score ranges cost you:
| Credit Score | Est. Rate | Monthly Payment | Total Interest |
|---|---|---|---|
| 760 – 850 | 6.50% | $2,023 | $408,280 |
| 700 – 759 | 6.75% | $2,076 | $427,185 |
| 680 – 699 | 7.00% | $2,129 | $446,440 |
| 660 – 679 | 7.25% | $2,184 | $466,085 |
| 640 – 659 | 7.75% | $2,294 | $505,840 |
| 620 – 639 | 8.25% | $2,407 | $546,520 |
Going from a 620 to a 760 saves you roughly $138,000 in interest over 30 years on a $320,000 loan. That's not a small number — it's a car, a college fund, or years of retirement savings.
Conventional loan: Minimum 620, but you'll want 740+ for the best rates. These are the most common mortgages and have the most flexibility.
FHA loan: Minimum 580 with 3.5% down, or 500 with 10% down. FHA loans are government-backed and designed for buyers with lower credit. They require mortgage insurance for the life of the loan.
VA loan: No official minimum — the VA doesn't set one — but most lenders want 620+. Available to veterans and active service members with no down payment required.
Jumbo loan: Typically requires 700–720 minimum, often 740+. These are loans above the conforming limit ($766,550 in most areas) and lenders are stricter.
The national average FICO score in 2025 is approximately 717 — which falls in the "good" range. If you're above 717 you're ahead of the average American. If you're at 740 or above you're in the top tier for mortgage rates.
Pay down credit card balances. Your credit utilization ratio — how much of your available credit you're using — is the fastest lever you have. Getting each card below 30% utilization can add 20-50 points relatively quickly. Below 10% is ideal.
Don't close old accounts. Length of credit history counts for about 15% of your score. Closing an old card you don't use actually hurts your score by reducing your average account age and available credit.
Dispute any errors. About 1 in 5 credit reports contains an error. Check all three bureaus at AnnualCreditReport.com — it's free — and dispute anything that looks wrong. Errors can take 30 days to resolve but the payoff can be significant.
Don't apply for new credit. Every hard inquiry drops your score 5-10 points. Avoid applying for new credit cards, car loans, or any other financing for at least 6 months before your mortgage application.
Make every payment on time. Payment history is 35% of your score — the single biggest factor. Set up autopay for at least the minimum on every account so you never miss a payment.
Timeline tip: If your score needs work, start at least 6-12 months before you plan to buy. Most meaningful score improvements take 3-6 months to show up on your credit report after you make changes.
You can check your credit score for free through several sources — your bank or credit card issuer often provides free FICO scores, and services like Credit Karma show your TransUnion and Equifax scores at no cost. For the most accurate picture, check all three bureaus since mortgage lenders typically use your middle score from Experian, Equifax, and TransUnion.
Use our free mortgage calculator to see how your credit score range affects your monthly payment and total interest — plug in your numbers and see the real cost difference.
Open the Calculator →This article is for educational purposes only and does not constitute financial or mortgage advice. Credit score ranges and rate estimates are approximate and may vary by lender and market conditions. Consult a licensed mortgage professional for guidance specific to your situation.