Credit Scores for your Mortgage

FHA vs. Other Loan Types: What to Know About Credit Scores

True or false? Your credit score is usually the first thing lenders check when you’re buying your first home.
True. Your credit score is a key factor in the early stages of a mortgage application and often determines how lenders structure your options.

True or false? Conventional, FHA, and other home loans always have the same FICO score requirements.
False. Each loan program has its own credit standards, which can shift based on market conditions and lender guidelines.

True or false? FHA loans tend to have more forgiving credit requirements because they are backed by the federal government.
True. FHA loans, along with other government-backed mortgages, offer more flexible credit thresholds because lenders receive federal protection.

True or false? Conventional lenders take on less risk than FHA lenders.
False. Conventional lenders assume more risk since their loans are not government-insured. As a result, they generally set higher credit score expectations.

True or false? A conventional lender may prefer a FICO score of 680+ to offer the most competitive rates.
True. While conventional loans may be available with scores as low as 620, lenders often reserve their best pricing for borrowers with credit scores of 680 or higher.

True or false? Your unique financial situation doesn’t matter much once lenders know your credit score.
False. Lenders also consider debt-to-income ratios, payment history, and overall financial stability when determining loan eligibility.

True or false? FHA loans are intended mainly for experienced buyers with excellent credit.
False. FHA loans are designed to help first-time buyers and borrowers with less-than-perfect credit enter the market more easily.

True or false? With a 10% down payment, you can qualify for an FHA loan with a FICO score as low as 500.
True. Borrowers with credit scores between 500–579 may still qualify, provided they can make a 10% down payment.

True or false? The VA sets a minimum FICO score of 620 for all VA loans.
False. The VA does not enforce a minimum credit score; individual lenders typically set their own, often in the 620–660 range.

True or false? VA lenders look mostly at your credit score rather than your broader financial profile.
False. VA underwriting places significant weight on residual income and the borrower’s overall financial picture—not just the score.

True or false? USDA loans have a required minimum FICO score of 640.
False. USDA does not set an official minimum credit score; lenders determine their own standards, though many use 640 as a benchmark for streamlined approvals.

True or false? Speaking with an FHA-approved lender is helpful for first-time buyers or those rebuilding after financial setbacks.
True. An FHA-approved lender can help you understand your most realistic loan options and guide you through the qualification process.