Mortgage Myth: Your Credit Score Has to Be Perfect

Advertised mortgage rates are almost always quoted for borrowers with 740–760+ credit scores. When buyers see those rates and then check their own score, they assume they don't qualify at all. In reality, those are the rates for the best-priced tier — not the minimum to get a loan. Lenders have rate tiers, not a single cutoff, and most buyers fall somewhere in the middle.

The VA itself sets no minimum credit score for VA loans. Individual lenders set their own overlays — most require 580–620 — but this is far lower than the 740 many buyers assume. If you're a veteran or active-duty service member, your credit score is much less of a barrier than you think. The VA's guarantee reduces lender risk, which is why they can accept lower scores.

FHA loans allow a 580 credit score with just 3.5% down. If your score is between 500 and 579, you can still qualify — you'll just need 10% down instead. FHA is specifically designed for buyers who don't have perfect credit, and it's one of the most widely used programs for first-time buyers in Colorado Springs and the Front Range.

Conventional loans backed by Fannie Mae and Freddie Mac require a minimum 620 credit score. You won't get the best rate at 620, but you can absolutely get a loan. The rate difference between a 620 and a 680 score is real — but it may be worth buying now and refinancing later once your score improves, rather than waiting years to save a fraction of a percent.

Lenders look at the full picture: debt-to-income ratio, employment history, down payment, and reserves. A buyer with a 640 score, stable income, and 10% down is often a stronger applicant than someone with a 700 score and a shaky employment history. Your score is one factor — not the only one. A mortgage broker can show you how your full profile looks to lenders before you formally apply.

The first step is a soft-pull credit review — no impact to your score, and it shows exactly where you stand. From there, Jerry and Lisa can tell you whether you qualify today, which loan program fits best, and if waiting 60–90 days to improve your score would meaningfully change your rate. In many cases, buyers are closer to qualifying than they realize.