From 500 to 850: Here’s How Your Credit Score Shapes Your Mortgage Options

A FICO credit score, short for Fair Isaac Corporation, plays an important part in buying a home. How high or low your score is will determine what kind of loan you qualify for.

FICO scores range from 300 to 850. A higher score shows a person is at a lower credit risk, which is good.

Lenders look at FICO scores when people apply for a mortgage, and the credit score will play a role in determining whether you qualify for a mortgage and what kind of interest rate you can lock in.

Currently, mortgage interest rates for a 30-year fixed loan dipped down again to 6.27% for the week ending Oct. 16, down from 6.3% the prior week, according to Freddie Mac.

If you want to lock in a rate, your credit score will play a role. A score of 620 is a "fair" rating, but people applying for a Federal Housing Administration loan may be able to get approved with a credit score of 500, which is considered a low score.

FICO says the average score decreased 2 points to 715 since 2024 due to increases in utilization and delinquency—including the reporting of student loan delinquencies.

"Consumers absolutely need to be aware of their credit scores through the (credit) bureaus," Jessica Vance, real estate agent and mortgage broker, tells Realtor.com®.

FICO compiled the average credit score rating by state, but securing a mortgage will entail other factors, as well.

"Different lenders and loan types have different credit score requirements," explains Hannah Jones, senior economic research analyst at Realtor.com.

"Generally, borrowers with a low credit score will be limited in the type of loan they can take out, and may have additional requirements on down payment size or minimum income level."

About 38.1% of the U.S. population scored between 600 and 749 in 2021. In 2025, only 33.8% of the population fell between that range, according to recent research by FICO.

Loan scores

A conventional loan requires a minimum credit score of 620. Conventional loans, such as a 30-year fixed mortgage, are not insured by a government agency and follow certain standards set by the government-sponsored entities Fannie Mae and Freddie Mac. These are the most commonly used mortgage loans.

Borrowers who have a low credit score may qualify for a government-backed loan. An FHA loan requires a minimum credit score of 500, if you make a 10% down payment on your home purchase. If you put down less than that, the minimum credit score required is 580.

"It's important to be aware of where your credit score stands because it directly impacts your ability to purchase a home or a car. And determine what rate you may get through a lender or mortgage broker," says Vance.

According to Vance, there are simple ways to improve or maintain your credit score: paying bills on time every time for all debts, disputing any errors on your credit report, lowering your outstanding debt amounts, not closing old credit accounts lightly (it does affect your credit score), and always paying at least the minimum amount on any debts.

But it still takes patience. Building a credit score back up takes years, not months, to move that needle.

 "It will likely take several years to rebuild your credit score after it takes a major hit," Melanie Musson, finance expert with Quote.com, tells Realtor.com.