Minimum credit scores by loan type, how DTI affects your approval, and actionable steps to improve your odds.
Your credit score is one of the most important factors in determining your loan eligibility, interest rate, and required down payment. Different loan programs have different minimum requirements. Here is a breakdown by program:
| Loan Type | Min. Score | Notes |
|---|---|---|
| Conventional | 620 | Best rates at 740+. Each tier below 740 adds to rate. |
| FHA | 580 (3.5% down) / 500 (10% down) | Most lenders overlay at 580+. 500–579 requires 10% down. |
| VA | 620 (typical) | VA has no official minimum. Most lenders require 580–620. |
| USDA | 640 | GUS automated approval typically requires 640+. |
| Jumbo | 700–720 | Higher requirements due to larger loan amounts. |
| Non-QM / Bank Statement | 600–620 | Varies by program and down payment amount. |
| DSCR | 620 | Property income qualifies the loan; personal credit still reviewed. |
How credit is pulled
Lenders pull a tri-merge credit report from all three bureaus (Equifax, Experian, TransUnion) and use the middle score of the three. For joint applications, the lower of the two middle scores is used. Multiple mortgage inquiries within a 14–45 day window count as a single inquiry for scoring purposes.
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Start my personalized rate in 60 secondsDTI (debt-to-income ratio) measures how much of your gross monthly income goes toward debt payments. It is one of the primary factors lenders use to evaluate your ability to repay a new loan.
There are two DTI calculations: front-end (housing expense only) and back-end (all monthly debt obligations). Most lenders focus on back-end DTI.
DTI Calculation Example
| Loan Type | Max DTI (Back-End) | Notes |
|---|---|---|
| Conventional (DU/LP) | 45%–50% | AUS may approve higher with strong compensating factors |
| FHA (TOTAL Scorecard) | No hard cap | TOTAL Accept: no cap. Manual underwrite: 31/43 (up to 40/50 with factors) |
| VA | No hard cap | Residual income is the primary qualifier. DTI is secondary. |
| USDA | 41% | 29/41 front/back. GUS may approve higher. |
| Jumbo | 43%–45% | Stricter guidelines, varies by investor. |
| Non-QM | 50%–55% | Varies by program and documentation type. |
If your credit score or DTI is close to the limit, there are concrete steps you can take to improve your position before applying.
Pay down revolving balances
Credit utilization (balance ÷ credit limit) accounts for 30% of your FICO score. Getting each card below 30% utilization — and ideally below 10% — can raise your score 20–50 points within 30–60 days.
Don't open new credit accounts
Each new credit inquiry can lower your score 5–10 points. Avoid applying for new credit cards, auto loans, or personal loans in the 6 months before applying for a mortgage.
Pay off or pay down installment debt
Eliminating a car payment or student loan reduces your DTI directly. Even paying down a balance to reduce the minimum payment helps.
Dispute errors on your credit report
Pull your free credit reports from annualcreditreport.com and dispute any inaccurate negative items. Errors are more common than most people realize and can be corrected within 30 days.
Add a co-borrower
If your income or credit score is borderline, adding a co-borrower with stronger credit or income can significantly improve your approval odds and rate.
Increase your down payment
A larger down payment reduces your LTV, which reduces risk for the lender. This can compensate for a lower credit score or higher DTI in some programs.
Tony AI
Tony will walk you through your qualification scenario and show estimated options — no commitment, no credit pull.
Start my personalized rate in 60 secondsLenders evaluate every mortgage application using four primary criteria, often called the "4 Cs of credit."
Credit
Your credit score and history. Shows how reliably you've repaid debt in the past. Lenders look at payment history, utilization, length of history, and derogatory marks.
Capacity
Your ability to repay — measured by DTI. Compares your monthly debt obligations to your gross monthly income. Lower DTI = more capacity.
Capital
Your assets and reserves. Down payment, closing costs, and post-closing reserves (typically 2–6 months of payments). Shows financial stability.
Collateral
The property itself. Lenders order an appraisal to confirm the property value supports the loan amount. LTV (loan-to-value) is the key metric.
Compensating factors matter
If one area is weak, strength in another can compensate. A borrower with a 640 credit score but 30% down payment and 6 months reserves may qualify for programs that a 640 score with 3% down would not.