As someone planning to buy my first home soon, I assumed I'd need a near-perfect credit score just to qualify for a loan. It turns out you don't, and most first-time buyers don't either. What I found once I started digging into it is that the "what score do I need" question has a few different answers depending on the loan, and that the score itself is only part of what a lender is weighing. Here's what actually matters.
There's no single "required" score
The minimum depends on the loan program:
- Conventional loans: there is no single universal minimum. A 620 score is still a common benchmark, particularly for manually underwritten loans, but automated underwriting can evaluate borrowers differently, and lenders may set their own requirements.
- FHA loans: FHA allows a 3.5% down payment with a score of 580 or higher, and borrowers between 500 and 579 may be eligible with at least 10% down.
- VA loans: the VA itself does not set a minimum credit score. The lender still evaluates your credit and can impose its own requirements.
The score your lender pulls isn't the one your app shows you
This one surprised me. You don't have one credit score, you have many, and the scoring model a mortgage lender uses may be different from the one you see in a free banking or credit-monitoring app. Mortgage lenders commonly review credit information from all three major credit bureaus. For a single borrower, they generally use your middle score of the three. With more than one borrower, how the scores are combined can depend on the loan program and the underwriting method.
The score in your banking app is still a useful directional check, just don't be surprised if the number your lender pulls comes back a little different.
Program minimum vs lender minimum
Even when a loan program allows a lower score, individual lenders can require a higher one. This is called a lender overlay. One lender might decline a 590 FHA file that another lender approves. If your score is on the edge, it's worth talking to more than one lender rather than assuming a single "no" is final.
Why the number still matters even if you qualify
Getting approved and getting a good rate are two different things. Lenders price loans in score tiers, and moving up a tier can lower your interest rate. On an Orange County home, where prices and loan sizes are high, even a modest rate difference changes your monthly payment and what you pay over the life of the loan. That's why it can be worth a few months of work to move from one tier to the next before you buy.
What actually moves your score
The biggest factors, roughly in order:
- Payment history: paying on time, every time, matters most.
- Amounts owed / credit utilization: how much of your available credit you're using. Keeping card balances well below their limits helps.
- Length of credit history: a longer history generally helps. Closing a card can backfire by cutting your available credit and raising your utilization, so don't close accounts just to try to boost your score.
- New credit: opening several new accounts in a short window can ding your score.
- Credit mix: a blend of account types is a minor positive.
What to do six to twelve months before you buy
- Check your credit reports early at annualcreditreport.com and dispute any errors.
- Pay down credit card balances if you can, this is often the fastest lever.
- Don't open new credit cards or finance a car right before applying.
- Don't close old accounts just because you think it will improve your score. Closing a card can reduce your available credit and raise your utilization.
- Keep everything current. A missed payment can have a significant negative impact on your score.
What to do next
Talk to a lender earlier than you think you need to. They can show you the mortgage scores they're using, explain what thresholds matter for the loan options you're considering, and help you understand whether improving your credit could change your approval or pricing. If you want, I can connect you with lenders who work with first-time buyers in Orange County. Then you'll know your real starting point instead of guessing.