Updated for 2026: this guide was first published in 2019, and the numbers have moved. The average FICO Score in the U.S. was 713 in 2025 (Experian), and lenders’ pricing bands have tightened — so your score matters at least as much as it did then. Here’s the updated picture.
If you’re considering making the leap to homeownership, there’s more to think about than the curb appeal of those Chicago homes for sale — the health of your credit score tops the list. To many, a credit score seems like a random trio of numbers determined by a complicated algorithm, but it represents much more to a lender who’s considering whether to approve your mortgage loan. While you may not need a perfect credit score, it’s important to know what you can do to improve your numbers.
A low credit score can indicate you’re a risky borrower, while a high score can significantly upgrade the mortgage terms you’re offered. But even if your score teeters on the edge of dismal, there are steps you can take to speed up the credit repair process and improve your chances of landing a home with manageable loan terms.
What’s the minimum credit score for a mortgage?
The minimum credit score required to receive a loan depends in large part on the type of loan you’re considering. As of 2026: FHA loans have some of the lowest requirements — a score of 580 with a 3.5% down payment, or as low as 500 with a down payment of 10% or more. For conventional loans, most lenders look for at least 620. VA loans have no official minimum set by the VA, though most lenders look for around 620; USDA loans likewise have no official minimum, with lenders generally wanting 640; and jumbo loans usually require 700 or higher. Bear in mind that individual lenders can set requirements above these program minimums, so getting a “no” from one lender doesn’t mean you’re out of luck.
What is a good credit score?
Beyond approval for a mortgage, the range your credit score falls within can drastically change the interest rate you can lock down — and the amount you’ll pay in private mortgage insurance (PMI), if applicable. The average U.S. FICO Score was 713 in 2025, and about 70% of consumers score 670 or higher, which lenders treat as “good” or better (Experian). The best mortgage pricing, though, generally starts at 740 and above. Even small differences matter: a shift of around 20 points can move a borrower’s rate by roughly 0.25%–0.50% through lender pricing adjustments, which adds up to tens of dollars a month — and thousands over the life of a loan. In simple terms, below 700 is likely to be considered “fair” in the world of mortgages; 740-plus is where the best terms begin.
How to improve your credit score
Whether your score is too low to secure a mortgage or you’d rather use available funds to fix your financial situation (instead of putting it toward a larger down payment), there are steps you can take today to start improving your credit score right away. Your FICO Score is built from five factors: payment history (35%), amounts owed — including your credit utilization ratio (30%), length of credit history (15%), credit mix (10%) and new credit (10%).
Many credit score problems are the result of a high credit utilization ratio — debt that is high in comparison to the credit available. The long-standing rule of thumb still holds in 2026: keep charges below 30% of your available credit limit, and under 10% if you want the strongest scores. One of the easiest ways to improve your score is to pay down credit card debt, keeping this ratio in mind, because utilization alone makes up 30% of your score.
The single biggest factor, though, is your payment history — your ability to make on-time payments to your creditors (35% of your score). Set up automatic payments so you never miss. If you see a recent late payment on your report, one solution is to talk to the creditor and ask for a goodwill deletion. While this likely won’t work for a serial late-payer, it could be granted for a one-time offender. Also check your reports regularly: you’re entitled to free weekly credit reports from all three bureaus (Experian, Equifax and TransUnion) through AnnualCreditReport.com, and disputing genuine errors can lift a score once they’re corrected.
While these fixes normally take a month or two to be reflected in your credit score, your lender can speed up the process by doing a rapid re-score. This requires gathering up pertinent documents to show the changes made — like a new credit card statement or letter of deletion — and using the lender’s credit company to request an updated score from the credit bureaus. This could lead to an updated score in days instead of months, which can make all the difference when you’re trying to get pre-approved for a home loan in a competitive market.
Sources: Experian (average FICO Score data, 2025); Bankrate (credit score needed to buy a house, 2026); FICO scoring factor weightings via Investopedia; The Lenders Network (2026 mortgage credit guide).