What FICO Score (Fair Isaac) Do You Need to Buy a House?

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• Your required FICO score varies by loan type, ranging from roughly 500 for certain FHA loans up to 700 for most jumbo loans.
• Conventional loans generally need a FICO score of 620 or higher; lenders may accept 580 with at least 10 % down, but rates improve noticeably above 640.
• FHA loans typically require a FICO score of 580 for the 3.5 % down option, and a score of 500 is permissible if you can put down 10 % or more.
• VA loans have no formal minimum, yet most lenders look for a FICO score of 620; a score of 640 or higher secures the best rates.
• USDA Rural Development loans usually demand a FICO score of 640; a few lenders will consider 580, but expect higher interest costs.
• Jumbo loans (amounts above the conventional limit) commonly require a FICO score of 700; some lenders will lower the floor to 680 when you have strong income and >20 % equity.
• Portfolio or bank‑statement loans typically set the bar at a FICO score of 660, with limited cases accepting 640 if you provide substantial cash reserves.

The FICO score that unlocks the lowest mortgage rates in 2024 is generally 760 or higher.

• 760 +  - lenders routinely offer their best advertised rates; even a 0.12 %‑0.15 % discount compared with scores in the 720‑739 band.
• 720  -  759  - still qualifies for 'good' rates, but expect a small bump (about 0.10 %‑0.20 %) over the prime rate.
• 700  -  719  - rates rise noticeably; borrowers often pay 0.25 %‑0.40 % more than the 760‑plus tier.
• Below 700  - lenders may add 0.50 %‑0.75 % or more, and some may require a larger down payment to offset risk.
• These ranges align with the minimums outlined earlier for each loan type and set the stage for the trade‑off discussion in the next section on lower FICO versus bigger down payments. For the latest lender data, see Consumer Financial Protection Bureau mortgage rate analysis.

Lenders base the primary underwriting decision on the FICO score, because most automated systems (Fannie Mae, Freddie Mac, major banks) are calibrated to that model. They still pull a VantageScore or an internal credit model as a secondary check, but the FICO score determines eligibility, rate tier, and required documentation.

When the FICO score meets the minimum for a loan type (see the earlier table), lenders apply the corresponding interest rate tier; a 720 typically lands the best rate, while a 660 still qualifies for conventional financing but adds a few basis points.

If the FICO score falls below the threshold, lenders may rely on a VantageScore or alternative data to decide whether to approve with a higher rate or demand a larger down payment, setting up the discussion in the next section on low‑FICO options. For the latest 2024 standards, consult the 2024 mortgage credit guidelines.

FHA, VA, and USDA loans let low‑FICO borrowers qualify, but each program has its own score floor and cost trade‑offs.

FHA loans accept scores as low as 500, but only with a 10 % down payment; scores 580 + qualify with the standard 3.5 % down. VA loans have no formal FICO minimum, yet most lenders set a 620 floor to keep rates competitive. USDA loans generally require a 640 score, though some lenders will consider 620‑639 if the applicant demonstrates strong compensating factors.

• FHA - 500  -  579: 10 % down, higher upfront mortgage‑insurance premium (UFMIP) and annual MIP; 580 +: 3.5 % down, lower MIP.
• VA - No official minimum; 620 + typical. Low scores may increase the financing fee and trigger higher interest rates.
• USDA - Usually 640; 620‑639 possible with a solid debt‑to‑income ratio. Scores below 620 rarely approved.
• Rate impact - A 20‑point drop below the program's average adds roughly 0.125 % - 0.25 % to the APR; the effect is larger for FHA because of mandatory MIP.
• Eligibility - All three require stable employment, sufficient cash reserves, and the property to meet program‑specific condition standards.

If your score sits below these thresholds, the next section explains how to proceed when your FICO is under 620.

If your FICO score sits below 620, you still have several paths to homeownership.

• Apply for an FHA loan, which accepts scores as low as 580 with 3.5 % down; scores 500‑579 may qualify with a 10 % down payment.
• Use a VA loan (if you're eligible); lenders often approve borrowers with scores in the 580‑600 range and require no down payment.
• Consider a USDA Rural Development loan; full automation starts at 640, but manual underwriting can fund applicants with scores between 620‑639.
• Increase your cash contribution to 10‑20 % to satisfy conventional underwriting despite a sub‑620 score.
• Add a credit‑worthy co‑signer or joint applicant; the combined profile replaces the individual FICO for qualification.
• Shop non‑QMD or portfolio lenders that offer subprime conventional mortgages, acknowledging higher rates and stricter terms.

A 20‑point drop in your FICO score typically nudges the mortgage rate up by about 0.25‑0.5 percentage points, which means a $300,000, 30‑year loan will cost roughly $30‑$60 more each month (about $360‑$720 annually); the same swing applies to FHA, VA or USDA loans, though government‑backed programs sometimes cushion the increase by a tenth of a point (how credit scores impact mortgage rates).

This rule of thumb follows the thresholds we outlined earlier for minimum scores by loan type and helps you gauge the financial penalty before you explore the options for sub‑620 scores.

A lower FICO (around 620) can still secure a conventional loan if you boost the down payment to 20% or more; the extra equity usually removes PMI and narrows the rate gap that a modest score creates. Lenders treat the larger cash cushion as a risk offset, so a 620 borrower putting 20% down might see a 4.75% rate versus a 5.0% rate with only a 5% drop.

A higher FICO (740 +) lets you stay at the standard 5%‑10% down and still lock the best rates; you'll likely incur PMI until you hit 20% equity, which adds to the monthly cost despite the lower interest.

For example, a 740 borrower with 5% down could qualify at 4.5% but pay PMI, whereas a 620 borrower with 20% down pays 4.75% with no PMI. As we covered in the 2024 conventional loan guidelines, the trade‑off hinges on how much cash you can front versus how much rate premium you can tolerate.

Boost your FICO quickly with these five actions before you submit a loan application. Implement each step promptly; most gains appear within a month.

1. Lower credit‑card utilization to 10 % or less by paying down balances or requesting a credit‑limit increase. Utilization drives the score, and dropping from 35 % to 9 % can add 20‑30 points.
2. Dispute inaccurate items on your credit report. Use AnnualCreditReport.com, flag errors, and follow up with the bureau; clean records often raise the score 10‑15 points.
3. Freeze new credit inquiries. Avoid opening any cards or loans for at least 30 days; each hard pull can shave 5‑10 points.
4. Keep older accounts open and active. Length of credit history accounts for up to 15 % of the FICO formula; closing a decade‑old card can shrink the score.
5. Automate on‑time payments for all revolving and installment debts. Consistent punctuality builds the strongest payment‑history factor, the biggest driver of a higher FICO.

Run these checks before any lender runs your credit to protect your FICO score and avoid surprises.

• Pull your free credit reports from the three major bureaus at Annual Credit Report website and verify personal data, account status, and any errors.
• Dispute any inaccuracies immediately; each correction can lift your FICO score by 5‑20 points.
• Freeze or limit new credit inquiries for the next 30‑60 days; even a soft pull can tip a marginal FICO score below the loan minimums discussed earlier.
• Pay down revolving balances to below 30 % utilization; lenders view lower utilization as lower risk.
• Ensure all recent debts are reported as current; a single 30‑day delinquency can drop a FICO score 50 points.
• Gather and organize proof of income, employment, and down‑payment source so the lender can focus on verification instead of additional credit checks.
• Get a pre‑qualification that uses a soft pull; it shows likely eligibility without affecting the FICO score, setting up the hard pull later with confidence.

VantageScore 4.0 can still sit at 700 while your FICO score drops into the low‑600s in three uncommon scenarios:

a recent severe derogatory (e.g., a charge‑off) that VantageScore discounts more aggressively than FICO 10; an unusually high revolving‑balance‑to‑limit ratio on a newly opened credit‑card mix that FICO penalizes sharply; and a 'thin' credit file where utility‑payment data lifts the VantageScore, yet FICO deems the overall history too sparse.

These VantageScore - FICO gaps arise because the models weight factors differently.

A fresh major delinquency hurts the FICO score immediately, while VantageScore may wait several months before applying the full penalty. High utilization on a new card spikes the FICO score's risk calculation, even though VantageScore treats recent balances with a softer curve. Finally, alternative‑data inclusions (like rent or telecom payments) boost the VantageScore, but FICO 10 still requires traditional revolving or installment accounts to generate a robust score, leaving the FICO score comparatively low.

A cosigner or joint applicant can turn a marginal FICO score into an approved mortgage.

• The second party's credit history is combined with yours, so lenders often accept a primary FICO as low as 580 when the co‑borrower clocks 720 or higher.
• Joint income boosts the debt‑to‑income ratio, letting you qualify for a larger loan despite a lower personal score.
• Lenders may offer a better interest rate because the overall risk profile improves; a 720 co‑borrower can shave 0.25 - 0.5 % off the APR compared with a solo 620 applicant.
• The cosigner is equally liable for the loan; missed payments damage both credit reports, so choose someone with a stable payment history.
• Some loan programs, such as FHA, explicitly allow a non‑primary borrower to meet the minimum FICO requirement, expanding options for first‑time buyers.

When selecting a cosigner, verify that their credit‑reported FICO score exceeds 700 and that they understand the legal responsibility. how cosigners affect mortgage approval provides a concise overview of the trade‑offs.

If you secure a reliable joint applicant, you can proceed to the next step - calculating the extra cost of a lower personal FICO - without fearing outright denial.