What Credit Score Do You Need to Buy a House in 2026?
The credit score you need to buy a house in 2026 depends on the door you walk through.
FHA will insure a loan at a 500+ score. The VA sets no minimum at all. And as of late 2025, Fannie Mae and Freddie Mac stopped requiring a hard credit score cutoff on conventional loans run through automated underwriting.
None of that means score doesn't matter. It still decides your rate, your mortgage insurance, and whether your mortgage application sails through or gets stuck in conditions.
This guide breaks down what each loan program actually requires in 2026.
Table of Contents
The Baseline: 2026 Minimum Credit Scores by Loan Type
Start with what the rulebooks say, not what a loan officer told a friend three years ago.
The federal government and mortgage agencies set hard floors for credit eligibility.
If your credit score falls below these numbers, the automated systems will not even generate a baseline approval.
Baseline Credit Score For FHA Mortgages
HUD's Single Family Housing Policy Handbook 4000.1 sets a tiered floor.
A 580 score qualifies you for FHA's signature 3.5% down payment.
Fall between 500 and 579, and you can still get an FHA loan, but you'll need 10% down.
Below 500, FHA won't insure the loan at all.
That's the statutory floor and NOT what most lenders will actually accept, which we'll get to next.
Baseline Credit Score For Conventional Mortgages
This is where 2026 looks nothing like 2024.
For decades, 620 was gospel. Effective November 15 - 16, 2025, Fannie Mae's Desktop Underwriter (DU) and Freddie Mac's Loan Product Advisor (LPA) both eliminated the hard minimum credit score requirement for loans run through their automated systems, per Fannie Mae's Selling Guide Announcement SEL-2025-09 and Freddie Mac's own LPA FAQ, which confirms an Accept risk class no longer requires a minimum Indicator Score.
DU and LPA no longer decline a file purely because the score is under 620; they weigh the entire credit and income profile instead.
Manual underwriting is a different story, and it isn't one flat number: Fannie Mae's Eligibility Matrix sets a tiered floor for manually underwritten files that ranges from 620 (1-unit primary residence, 75% LTV or below, with added reserves) up to 700–720 for cash-out refinances, multi-unit properties, and second homes.
Baseline Credit Score For VA Mortgages
The VA Lenders Handbook, Pamphlet 26-7 [Chapter 4, Credit Underwriting], sets no minimum credit score at all.
Lenders evaluate the entire credit record (not an isolated number) with particular weight on payment patterns in the last 12 months.
That flexibility is real, but it's the lender's overlay, not VA policy, that ultimately draws the line most veterans encounter.
Lender Overlays vs. Government Minimums
The government sets a floor.
But, you must understand "overlays." An overlay is an internal rule a specific bank or lender adds on top of the government minimums to protect their own financial interests.
FHA Overlays
HUD insures down to 500. In practice, most FHA-approved lenders won't go below 600-620, and plenty cap at 620–640 as an internal risk policy; it's a restriction the Handbook explicitly permits lenders to add on top of HUD's floor.
Credit unions and smaller regional lenders are more likely to work near the 580 line than large national retail banks, because overlays are a business decision about risk appetite, not a regulatory requirement.
If you have a 580 credit score, you meet government standards, but you will likely face immediate denial at a major bank due to their internal overlays. You must specifically seek out FHA-focused mortgage brokers who advertise "no overlays."
Conventional Overlays
Now that DU and LPA no longer enforce 620 as a hard stop, the overlay conversation has shifted rather than disappeared.
Individual lenders can still impose their own floor on top of whatever DU or LPA approves; many are doing exactly that during this transition; they are treating sub-620 approvals with extra scrutiny on reserves, employment history, and documentation.
A DU "Approve/Eligible" finding is necessary, but it isn't a guarantee your specific lender will honor it at that score.
Some conservative credit unions will bump their internal conventional minimum to 640 or 660, to reduce default risks on their balance sheets.
VA Overlays
Since the VA itself is silent on score, the number you hear quoted, usually 580 to 640, is 100% lender policy.
Automated underwriting through the VA's system still evaluates the full file: credit, debt-to-income, residual income, and reserves together.
When a lender's system flags a borrower as "refer" rather than "accept," it's moved to manual underwriting, where the Handbook's residual income standards do the heavy lifting instead of a FICO cutoff.
The takeaway: two lenders can pull the same credit report and reach different conclusions. Therefore, shopping multiple lenders isn't just about getting the best possible interest rates; it's about finding whose overlay matches your file.
The industry standard VA overlay in 2026 is 620.
A few specialized veteran-focused lenders will drop their overlay to 580 or even 550, but these lower scores typically trigger intense manual underwriting.
Credit Score You Actually Need for a Hurdles-Free Approval
Being technically eligible and painlessly approved for a mortgage are two different experiences.
The minimum score gets you in the door; the "sweet spot" gets you a fast "Approve/Eligible" from the Automated Underwriting System (AUS).
FHA: 620 to 640
FHA loans run through the FHA TOTAL Mortgage Scorecard.
Below 580 you're fighting overlays on top of a 10% down requirement.
At 580 - 619, you'll qualify on paper, but expect more manual underwriting, stricter reserve requirements, and a smaller lender pool.
While 580+ credit score secures low down payment eligibility, the critical threshold for a smooth approval is 620. Cross into the mid-600s and most FHA lenders' automated systems clear you without extra conditions.
Scores below 620 are severely penalized by the TOTAL Scorecard algorithm if you carry higher Debt-to-Income (DTI) ratios.
While the handbook no longer enforces a hard DTI cap for scores between 580 and 619 in automated underwriting, the algorithm will almost certainly issue a “Refer” finding for lower scores with elevated DTIs.
This triggers a manual downgrade.
It turns a fast automated approval into a tedious manual underwriting grind, where strict DTI caps of 31/43 do apply automatically to scores under 580 without exception, whereas scores of 580 - 619 are capped at 31/43 unless specific compensating factors are documented to exceed them.
Conventional: 680 to 700+
DU and LPA will now consider scores below 620, but "considered" isn't "approved without friction."
A file in the high 500s or low 600s that clears automated underwriting still tends to carry compensating requirements — larger reserves, lower DTI, bigger down payment.
Once you're at 680 and climbing toward 700+, the loan-level pricing hits (more on that below) shrink fast and DU findings come back cleaner with fewer stipulations.
Following Fannie Mae’s overhaul of the Loan-Level Price Adjustment (LLPA) matrix, the top tier for maximum pricing benefits and frictionless underwriting shifted.
Today, a score of 780 or higher is the conventional sweet spot.
At 780, you secure the best baseline pricing; the system rarely questions minor credit blemishes and lenders require far less documentation regarding your cash reserves.
VA: 620 to 680
Because VA mortgage lenders weigh residual income as heavily as score, a 620+ borrower with strong residual income and a clean 12-month payment history usually clears without a fight.
Below 620, you're relying on a lender's manual-underwriting appetite and your own compensating factors, such as reserves, low payment shock, stable employment.
Hitting 680 almost guarantees a streamlined process.
At this tier, you easily bypass the manual underwriting restrictions that lenders enforce on lower scores, though you must still strictly pass the VA’s standard residual income calculation.
High credit scores do not grant a pass on the required residual income math.
Across all three programs, the score that gets you a smooth closing sits roughly 40–80 points above the technical minimum. That gap is where lenders stop asking for extra letters of explanation.If you consider it in dollar terms, the "sweet spot" argument gets concrete really fast.
On a $350,000, 30-year conventional loan, a borrower at 760+ might see a rate near 6.5%, putting the monthly principal and interest around $2,212.
A borrower in the 620–659 band on the identical loan, after loan-level price adjustments are baked into the rate, can see something closer to 7.5–7.75%, pushing the payment past $2,500 a month and adding tens of thousands of dollars in interest over the loan's life.
That gap isn't merely a rounding error. It's the difference between a manageable payment and a stretched one, and it exists entirely because of where your score falls on the pricing grid, not because of anything else in the file.
How Your Credit Score Affects Interest Rates in 2026
The cost of borrowing is tightly linked to your exact credit tier.
Conventional Loans Price on a Grid
Fannie Mae's Loan-Level Price Adjustment (LLPA) Matrix, which remains unchanged following its historic May 2023 structural overhaul, charges a fee expressed as a percentage of the loan amount.
It is based on credit score crossed with loan-to-value. The spread is not small.
At 90.01 - 95% LTV, a borrower at 780+ pays a 0.250% LLPA.
A borrower at 639 or below pays 2.000% LLPA, resulting in an eight-fold difference on the identical purchase balance.
At 80.01 - 85% LTV, the gap remains severe: 0.375% at 780+ versus 2.625% for a score of 639 and below.
Freddie Mac applies a completely identical grid through its Exhibit 19 Credit Fees Matrix; because both entities are regulated by the FHFA, their risk fees match perfectly, making them interchangeable.
In practice, lenders convert these fees into rate, meaning a lower score doesn't just cost you more upfront but it raises your quoted rate for the life of the loan.
FHA Prices Remain Flat Across Credit Tiers
FHA loans are heavily subsidized by government insurance.
Therefore, FHA doesn't use a credit-score-based rate grid the way conventional does. FHA interest rates are remarkably flat across credit tiers. In fact, a borrower with a 600 score will receive an interest rate very similar to a borrower with a 750 score.
Your mortgage insurance premium is set by loan term, LTV, and loan size (not your score) as per HUD Mortgagee Letter 2023-05.
That's precisely why FHA remains the more competitive option for buyers below roughly 680.
You're not paying a risk-based penalty on the interest rate itself, only through your lender's own risk-based rate sheet, which tends to move less dramatically than the LLPA grid.
VA Prices on the Funding Fee, not the Score
VA loans carry no LLPA-style grid tied to credit score.
Your upfront cost is the VA funding fee; it’s 2.15% for first-time use with less than 5% down, drops to 1.50% at 5% down, and falls to 1.25% at 10% down or more as per the VA Circular 26-23-06 rates that remain in effect through 2026.
Veterans with any compensable VA disability rating (10% or higher) are exempt completely; a 0% non-compensable rating does not qualify for the exemption.
Your note rate still reflects the lender's own risk-based pricing for score, but there's no government-mandated grid stacking on top the way there is with conventional LLPAs.
VA loans traditionally offer the lowest interest rates on the market. Like FHA loans, the base rate does not fluctuate wildly based on your score. However, lenders may charge "discount points" (upfront fees) to borrowers in the 580-620 range to offset the perceived risk of funding a lower-score VA loan.
How Your Credit Score Influences the PMI
If your down payment is under 20% on a conventional loan, PMI is priced almost entirely off your score and LTV; the swing in this case is steep.
Mortgage insurers like MGIC publish rate cards that price monthly PMI as a percentage of loan amount, tiered by credit score band and LTV.
Applying MGIC's published 30% coverage tier at 90.01 - 95% LTV: a 760+ borrower is charged 0.37% annually, while a borrower in the 620 - 639 band is charged 1.30% for identical coverage (i.e. roughly 3.5 times more).
In dollars, on a $400,000 home with 5% down ($380,000 loan balance), that works out to about $117 a month for the 760+ borrower versus about $412 a month for the 620–639 borrower; it results in a nearly $300 monthly gap for otherwise identical buyers.
Compare that to FHA's flat structure: per HUD Mortgagee Letter 2023-05 [Annual Mortgage Insurance Premium (MIP) table], annual MIP on a standard 30-year FHA loan runs 0.50% at 90% LTV or below and 0.55% above 90% LTV. Latter is the tier most first-time buyers land in with 3.5% down, regardless of credit score.
That flat structure is why FHA tends to beat conventional PMI below roughly 680 FICO credit score. Above that line the math flips: using the same MGIC rate card, conventional PMI keeps shrinking as score climbs through the 700s, while FHA's MIP stays fixed at 0.55% no matter how high your score goes.
VA loans sidestep this completely. There's no monthly mortgage insurance on a VA loan at any credit score; the one-time funding fee is the tradeoff instead, which is a large part of why VA loans remain the cheapest monthly payment among the three programs for otherwise comparable buyers.
Note: Per the CFPB's guidance on the Homeowners Protection Act, conventional PMI must automatically terminate once your balance is scheduled to reach 78% of the home's original value, provided you remain current (a timeline that a lower score cannot delay). However, you can request manual cancellation yourself at 80% LTV. At that 80% mark, servicers legally review your file for a good payment history, and an inferior credit score can give the lender a valid reason to deny early cancellation, extending how long you are forced to pay it.
How State Laws and DPA Programs Change the Rules
Credit score minimums for mortgages in the US are federal or agency-level, but plenty of the assistance layered on top of a loan is administered state by state.
First-time buyers often rely on Down Payment Assistance (DPA) programs issued by state Housing Finance Agencies (HFAs).
That assistance often carries its own credit floor, separate from FHA, VA, or conventional minimums.
Every state runs an HFA that offers some combination of down payment grants, forgivable second mortgages, or mortgage credit certificates for first-time and income-qualified buyers.
HUD maintains local homeownership resource listings by state and metro area, and the National Council of State Housing Agencies indexes every state HFA program in one place.
These programs typically require you to close through an approved participating lender using an FHA, VA, USDA, or conventional first mortgage. The DPA doesn't replace the underlying loan program's credit requirements, it stacks a second layer on top.
The state-specific credit floors vary widely and are often stricter than the base loan program.
Some state HFA programs set their own minimum around 620 regardless of the first mortgage type, even when the underlying FHA loan would otherwise accept 580.
A few programs tied to manufactured housing or specific property types set the bar even higher. Income limits, purchase price caps, and a mandatory HUD-approved homebuyer education course are nearly universal conditions across these programs, on top of whatever score the state sets.
If your score clears the federal minimum but not your state's DPA minimum, you may still close but without the assistance. Check your specific state HFA's published guidelines before assuming a DPA program will bridge a low down payment; the credit floor, not the down payment gap, is often the actual disqualifier.
DPA with FHA Loans
FHA loans paired with state DPA grants follow similar strictness. While HUD says 580 is fine, your state’s housing authority will likely demand a 620 or 640 minimum to release down payment funds.
You must satisfy both the FHA guidelines and the state’s DPA guidelines simultaneously.
DPA with Conventional Loans
State programs utilizing Fannie Mae’s HFA Preferred or Freddie Mac’s HFA Advantage regulate credit access.
While Fannie Mae and Freddie Mac's automated systems no longer enforce a hard 620 minimum stop for standard conventional loans, state housing finance agencies almost universally enforce a strict floor of 620 to 640 to qualify for their companion grant money. The state agency providing the public funds creates this rigid boundary to insulate the state's balance sheet from low-credit defaults.
DPA with VA Loans
Though VA loans require zero down payment, buyers sometimes use DPA to cover closing costs. State agencies apply the same 620-640 credit floors to VA borrowers utilizing public assistance grants, overriding the lenient VA guidelines.
Red Flags That Trigger Loan Denials Despite Good Credit
A good credit score gets your mortgage application into the underwriting phase. But, it doesn't immunize you from the things that actually ruin mortgage approvals.
CAIVRS hits (FHA specific): Every FHA borrower is run through the Credit Alert Interactive Voice Response System, which flags delinquent federal debt (e.g., defaulted student loans, SBA loans, or a prior FHA insurance claim paid within the last three years, per HUD's Single Family Housing Policy Handbook 4000.1 and the HOC Reference Guide on CAIVRS. A CAIVRS flag can stop an FHA file cold regardless of credit score.
New debt or inquiries between preapproval and closing: Underwriters re-pull credit close to closing. A new auto loan, an authorized-user add, or even a large unexplained inquiry can shift your DTI or score enough to change the AUS finding on all three loan types.
Undocumented large deposits: Fannie Mae, Freddie Mac, and FHA all require sourcing on deposits that look unusual relative to your regular income pattern. An unsourced cash deposit (even from a legitimate gift) can stall or sink a file if it isn't paper-trailed correctly.
DTI creep: FHA's manual-underwriting framework sets a strict baseline benchmark at 31% housing / 43% total debt. For borrowers with credit scores of 580 or higher, this has room to stretch to 37/47 with one compensating factor or 40/50 with two or more. However, if your score is below 580, you are locked into the 31/43 cap with no exceptions. Automated systems can clear higher ratios, but a DTI that balloons after preapproval is one of the most common late-stage denial triggers across all three programs.
Employment or income gaps: A job change, a drop from salary to commission, or an employment gap discovered during verification can undo an otherwise strong file, VA included, where residual income calculations depend on stable, verifiable income.
Collections on credit reports: FHA guidelines strictly scrutinize collection accounts on your credit report, but with a specific caveat. If you have non-medical collection accounts exceeding $2,000 in total, you have options. The cleanest route is to simply pay the collection accounts in full at or prior to closing using acceptable funds, bypassing any DTI penalty entirely. If you do not pay them off, the underwriter must determine if you have a formal payment arrangement with the creditor. If you do, that documented monthly payment is used in your DTI. If you lack an arrangement and do not pay the balance, the underwriter must hit your DTI with a phantom monthly payment equal to 5% of the total collection balance. This 5% calculation frequently pushes borrowers past the maximum DTI limits, causing a denial.
Recent derogatory item on credit report: The VA focuses heavily on your 12-month payment history. A 700 credit score will not save you if you have a 30-day late mortgage or rent payment within the last 12 months. The VA underwriter prioritizes recent housing payment shock over historical credit perfection.
When a lender does deny credit, federal law requires more than a shrug.
Under the Equal Credit Opportunity Act and [CFPB Regulation B, §1002.9], you're entitled to specific, accurate reasons for the denial or a documented right to request them, generally within 30 days of a completed application.
A generic "credit history" checkbox without the actual driving factor is a compliance red flag on the lender's end.
Mortgage ‘Approved with conditions’
It means the automated underwriting system, or the underwriter reviewing your file, has issued a favorable finding, but only once you satisfy a specific list of outstanding items.
Common conditions: an updated pay stub, a letter explaining a credit inquiry, proof a debt was paid off, a sourced explanation for a bank deposit, or a final verification of employment.
This is the normal, expected middle stage of nearly every mortgage, not a red flag. Once conditions clear, the file moves to "Clear to Close."
An actual mortgage denial is different
The lender has determined the file doesn't meet program guidelines or the lender's overlay.
No reasonable set of documents will change that outcome without a material change to the loan structure i.e. a bigger down payment, a co-borrower, or a different loan program entirely.
If you land in outright denial rather than conditional approval, your options are:
Address the specific reason cited in your adverse action notice, apply with a different lender whose overlay might fit your profile, switch loan programs (FHA instead of conventional is the most common pivot for credit-driven denials), or add a qualifying co-borrower to strengthen the combined file.
None of these require starting your credit-building process from zero; a documented compensating factor or a modest score improvement is often enough to flip the outcome with a different lender.
FHA manual underwriting
FHA is built for manual underwriting.
If the automated system denies you, a human underwriter takes over. You will receive an "Approved with Conditions" status.
The mandatory baseline rules require a minimum of 1 month of cash reserves for a 1-to-2 unit home, or 3 months for a 3-to-4 unit property. To push your DTI past standard caps, you can optionally deploy 3 months of verified payments in savings as an official compensating factor.
Conventional manual underwriting
Conventional manual underwriting is quite restrictive.
Fannie Mae caps DTI ratios much lower on manual files, and you will be requested to prove extensive cash reserves.
If you fail automated conventional underwriting, your loan officer will almost always flip your application to an FHA loan rather than attempting a conventional manual underwrite.
VA manual underwriting
VA manual underwriting relies heavily on "Residual Income" i.e., the cash you have left over each month after paying all bills and estimated taxes.
If your total DTI ratio exceeds 41%, the VA strictly requires your residual income calculation to exceed the standard regional baseline by at least 20%, regardless of whether it is automated or manual.
If your manually underwritten file stays at or below a 41% DTI, you are only required to meet the 100% baseline mark to move your application forward to a clear-to-close.
Market Realities: Where Low-Credit Buyers Actually Find Mortgages
Big national retail banks are usually the least flexible lenders in the market on credit-driven files.
If your score sits below the mid-600s, the more productive search usually goes elsewhere.
Credit unions: Member-owned institutions often underwrite with more individual judgment than a rigid corporate overlay allows. For their internal portfolio loans, some accept documented alternative payment history, such as rent, utilities, and insurance alongside or in place of a traditional score. However, for standard government or conventional loans, federal guidelines only allow alternative credit lines if you have a "thin file" (a credit score of zero); alternative credit cannot be used to overwrite or bypass an active, low credit score. Policies vary significantly by institution, so this is worth confirming directly rather than assuming.
Community banks and portfolio lenders: A portfolio lender keeps loans on its own balance sheet instead of selling to Fannie Mae or Freddie Mac, which frees it from conforming credit-score floors completely. That flexibility comes at a cost: typically higher rates and larger down payment requirements in exchange for the underwriting leeway.
CDFIs (Community Development Financial Institutions): These mission-driven, federally certified lenders specifically target underserved borrowers and often evaluate cash flow and community ties alongside or instead of a traditional credit score.
Non-QM lenders: Outside conforming and government-backed programs, a non-QM market has grown around bank-statement and alternative-documentation loans for borrowers who don't fit standard boxes. These borrowers may include self-employed buyers, recent credit-event recoveries, or those rebuilding after bankruptcy. Credit floors vary widely by lender and aren't published in a standardized way the way FHA, VA, or GSE minimums are, so this category is worth shopping directly rather than assuming a specific number applies.
FHA remains the default gateway: For most first-time buyers under roughly 680, FHA is still the path of least resistance precisely because its mortgage insurance doesn't punish lower scores the way conventional PMI does (yes, even with 2026's changes opening more conventional doors than before).
Actionable Steps to Make Your Credit Mortgage-Ready
Building credit from bad credit or no credit isn’t exactly easy but it isn’t impossible either.
Improving your credit score to qualify for a mortgage takes time, but with the right strategies and consistent efforts, you can reach the finish line.
Here's a realistic sequence.
Months 1–2: Diagnose: Pull your full tri-merge credit report. Dispute every inaccurate item you find. Errors on old collections, incorrect balances, or accounts that aren't yours are more common than most people assume. Disputing inaccuracies is free, but if you lack the time, resources or knowledge, you can always hire a legitimate credit restoration service provider to fix your credit.
Months 2–4: Attack utilization first: Revolving credit utilization is the single fastest lever available, if you want to raise your credit score to qualify for a mortgage (or qualify for better terms). Getting balances under 30% of your limits helps; under 10% helps more. This single change can move a score meaningfully within one to two billing cycles, faster than almost any other action available to you.
Months 3–6: Stabilize, don't shuffle: Don't open new credit cards, don't close old accounts (closing reduces available credit and can raise utilization), and don't finance a car or take on new debt while you're actively working toward a mortgage. Every new inquiry and every new account resets part of the clock.
Months 4–7: Build reserves and document everything: Lenders want to see seasoned funds; all incoming transactions should ideally be documented with a consistent paper trail. Avoid large, unexplained cash deposits during this window.
Months 6–9: Shop and lock in your lane: Get preapproved with at least two or three lenders across different types, if possible (e.g., a bank, a credit union, and a mortgage broker who can shop multiple wholesale lenders). Compare not just rate, but which lender's overlay actually fits your specific score, DTI, and reserve profile. If you're within striking distance of a pricing threshold i.e. 620, 680, 740, do ask your lender about a rapid rescore before you lock. It can reflect a paid-down balance faster than waiting for your next statement to post, though exact turnaround depends on the bureau and your lender's rescore vendor.
Target FHA and VA Waiting Periods: If you have a recent bankruptcy or foreclosure, you cannot just fix your score; you must wait out the clock. Conventional loans require a strict 4-year wait following a Chapter 7 bankruptcy discharge, and a 7-year wait following a foreclosure. FHA requires a strict 2-year wait following a Chapter 7 discharge, and a 3-year wait following a foreclosure or deed-in-lieu. The VA generally requires only a 2-year wait following either a Chapter 7 bankruptcy or a foreclosure [VA Pamphlet 26-7, Chapter 4]. If you filed a Chapter 13 bankruptcy, FHA and VA loans offer an accelerated path, allowing approvals after just 12 months of on-time plan payments with bankruptcy court permission, and requiring zero waiting period after a full discharge. In contrast, conventional loans require a strict 2-year waiting period following a Chapter 13 discharge date.
The number that gets you approved for a mortgage and the number that gets you approved cheaply are two different targets.
Aim for the second one.
The roadmap explained above is how you close that gap before you ever submit an application.
FAQs About The Credit Score You Need to Buy a House in 2025
Which FICO score version do mortgage lenders actually use?
When you check your credit on a free app, you are usually seeing a VantageScore or FICO 8. Mortgage lenders do not automatically use these.
Historically, the industry standard required pulling a "tri-merge" credit report using Classic FICO models (versions 2, 4, and 5) from all three bureaus.
However, the Federal Housing Finance Agency (FHFA) is actively transitioning the industry toward a Bi-Merge system for conventional loans (requiring data from only two bureaus) to reduce consumer costs.
Also, the FHFA is phasing in FICO 10T and VantageScore 4.0. If a traditional tri-merge is pulled, lenders use the median (middle) score. If a bi-merge is pulled under the new guidelines, lenders must use the lower of the two scores for your official application.
Whose credit score is used if I apply for a mortgage with a co-borrower?
It depends entirely on the type of loan you are getting.
For FHA and VA loans, lenders will use the Lowest Median Score rule. They find the middle score for both you and your co-borrower, and then use the lower of those two scores to qualify the entire loan.
However, Fannie Mae uses a more flexible rule for Conventional loans.
According to the Fannie Mae Selling Guide, B3-5.1-01, Fannie Mae allows an Average Median Credit Score for eligibility pricing.
For example, if you have a 780 and your spouse has a 640, Fannie Mae can average them to 710, making it easier to qualify. However, note that all individual borrowers must still meet Fannie Mae's hard baseline minimum credit score of 620 to participate.
Can I leave my spouse off the mortgage if they have bad credit?
Yes, you can apply as the sole borrower to shield the application from your spouse's low credit score if the need be.
However, if you live in a community property state (like Texas, California, or Arizona) and are using a government-backed loan (FHA, VA, or USDA), the underwriter is legally required to pull your "Non-Purchasing Spouse's" (NPS) credit report.
Their bad credit score will not be used against you, but their independent monthly debt obligations (such as personal auto loans or credit cards) will be added to your DTI ratio.
Conventional loans (Fannie Mae and Freddie Mac) do not require this. Under [Fannie Mae Selling Guide, B3-6-05], your non-purchasing spouse’s separate debts are not included in your DTI, even in a community property state, saving many conventional applications from an unexpected denial.
Can I buy a house with zero credit history?
Yes. If you have absolutely no credit score, you can still qualify for an FHA loan using "Nontraditional Credit" [FHA Handbook 4000.1, Section II.A.5.d].
This process requires manual underwriting.
You will need to provide 12 months of canceled checks or official bank statements proving you have consistently paid three alternative monthly bills on time.
Acceptable nontraditional references include rent, utility bills, cell phone bills, and auto insurance.
Will shopping around for the best mortgage rate ruin my credit score?
No, but you must be strategic about your timeline.
The Consumer Financial Protection Bureau (CFPB) and credit scoring models protect borrowers who are rate shopping by bundling multiple mortgage inquiries into a single hit.
However, while newer scoring models give you a 45-day window, the legacy Classic FICO models that many lenders still use on the backend only offer a 14-day window.
To be completely safe from multiple credit hits, you should restrict all of your official mortgage applications and hard inquiries to a strict 14-day timeframe.
How do student loans on IDR plans affect my mortgage approval?
Borrowers with good credit often fear student loan debt will wreck their DTI, but the rules depend on the loan type.
For FHA loans [FHA Handbook 4000.1, Section II.A.4] and Fannie Mae Conventional loans [Fannie Mae Selling Guide, B3-6-05], underwriters will use your actual Income-Driven Repayment (IDR) monthly amount.
If your documented IDR payment is $0, they will use $0.
Freddie Mac conventional loans also share this exact flexibility. Under Freddie Mac Guide Section 5401.2, an underwriter can utilize a $0 payment if it is supported by official IDR documentation.
The 0.5% phantom payment metric is only applied if the credit report shows $0 and the lender fails to acquire supporting paperwork establishing your active IDR status.
What is the minimum credit score for a USDA home loan?
While this guide focuses on Conventional, FHA, and VA loans, rural buyers often seek USDA loans.
The US Department of Agriculture utilizes the Guaranteed Underwriting System (GUS).
To receive a frictionless, automated "Accept" finding through GUS, you generally need a minimum credit score of 640 [USDA Handbook HB-1-3555, Chapter 10].
Scores between 580 and 639 are eligible, but they trigger stringent manual underwriting and require strong compensating factors.
Does being an "authorized user" on someone else's credit card help my mortgage score?
It can artificially inflate your raw score, but automated mortgage underwriting systems are specifically programmed to analyze it.
If your credit history relies on being an authorized user on a parent's or spouse's old credit card, the automated system handles it natively.
However, according to Fannie Mae Selling Guide [B3-5.3-06], if your application requires manual underwriting, that account is completely excluded unless you can document that another borrower on your loan owns it, or prove you personally made the monthly payments for the past 12 months.
How long does a late rent or mortgage payment affect my ability to buy?
While a late credit card payment is bad, a late housing payment is toxic to a mortgage application.
Underwriters scrutinize your housing history for any signs of recent delinquency.
Per Fannie Mae Selling Guide [B3-5.3-03], your existing mortgage structure must be fully current at application time Fannie Mae.
Also, government-backed programs and most conventional automated underwriting frameworks heavily penalize any 30-day late payments within the past 12 months.
If you logged a late housing payment 6 months ago, you will likely need to wait until a full 12-month clean tracking cycle has passed to achieve an automated system approval.
Do "Buy Now, Pay Later" (BNPL) accounts build my mortgage credit score?
Generally, no.
As of 2026, the majority of BNPL services (like Affirm, Klarna, or Afterpay) do not reliably report positive, on-time payment history to the major credit bureaus in a way that builds traditional mortgage-qualifying FICO scores.
However, if you default or miss a payment, the BNPL company will send the account to collections.
That collection account will report to the bureaus and drag down your mortgage credit score, triggering mandatory remediation tracking under Fannie Mae Selling Guide, B3-5.3-09.
Does shopping around with multiple lenders hurt your credit score?
Not if you do it within a short window.
FICO's own scoring rules, published directly by myFICO, ignore mortgage-related inquiries entirely for the first 30 days, then treat every mortgage inquiry within a 45-day window (14 days on some older FICO versions still used by a few lenders) as a single inquiry for scoring purposes.
Getting quotes from five lenders in the same two weeks costs you the same score impact as getting a quote from one.
Does a non-occupant co-signer's credit score help you qualify?
It's factored in, but it comes with a tradeoff. Fannie Mae's Selling Guide B2-2-04 permits non-occupant co-borrowers, and their score is included in the representative-score calculation.
However, leverage and underwriting type dictate your baseline limits.
For standard principal residences processed through Desktop Underwriter (DU), you can maximize financing all the way up to a 95% LTV/CLTV/HCLTV cap.
Tighter restrictions apply if the loan requires manual underwriting: if the occupying borrower contributes less than a 5% down payment out of pocket, the maximum LTV is restricted to 90%.
A strong co-signer's score can rescue an otherwise weak file, but it may cost you some low-down-payment flexibility depending on the underwriting track.
Will paying off a collection account raise the credit score my lender actually uses?
Maybe not. And this is where mortgage scoring gets counterintuitive.
Conforming mortgages sold to Fannie Mae or Freddie Mac are scored using older "classic FICO" models, per Fannie Mae's own Selling Guide B3-5.1-01 and those older models do not ignore paid collections the way newer FICO 9, FICO 10, or VantageScore 4.0 do, according to myFICO's own explanation.
Paying off an old collection is generally still the right financial move, and it can help with a lender's manual judgment call. But, don't assume it will move the specific score your mortgage lender pulls.
What credit score do you need to buy a manufactured or mobile home?
It depends on the loan program, and manufactured housing carries its own eligibility rules layered on top of standard credit requirements. According to Fannie Mae's Manufactured Housing Guidelines, manual underwriting is permissible for standard multi-width units, but it is strictly barred for single-width structures and MH Advantage properties, which mandate a DU "Approve/Eligible" system finding.
Per the Fannie Mae Eligibility Matrix, maximum LTV on a standard 1-unit purchase is 97% for a fixed-rate loan or 95% for an ARM, dropping to 65% for a cash-out refinance.
FHA insures manufactured homes through two separate programs - Title I (the home only) and Title II (home plus land on a permanent foundation), and credit standards differ between the two, so don't assume Title I automatically mirrors standard FHA guidelines.
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