Understanding Credit Requirements in Today’s Mortgage Market

One of the most common questions Erin Barrows hears from homebuyers is, “What credit score do I need to qualify for a mortgage?” It’s a great question—and in 2025, the answer has some new twists that could work in your favor.

Here’s what you need to know before applying for a home loan this year.

Minimum Credit Scores by Loan Type

While requirements can vary slightly by lender, here are the typical score benchmarks for the most common loan programs:

• Conventional loans: Most require a credit score of 620 or higher.

• FHA loans: You can qualify with a score as low as 580 if you're putting 3.5% down.

• FHA with 10% down: Some lenders may approve scores as low as 500 with a larger down payment.

“Even if your credit isn’t perfect, there are still options,” Erin says. “What matters most is matching the right program to your situation.”

What’s New in 2025: VantageScore 4.0

This year, Fannie Mae and Freddie Mac have begun incorporating a newer scoring model called VantageScore 4.0. The big benefit? It includes more data from your everyday financial behavior.

“On-time rent, utility, and even phone bill payments can now count toward your credit score,” Erin explains on erinbarrows.com/home. “That’s a game-changer for renters or anyone with limited traditional credit history.”

If you've been making regular, timely payments on non-credit accounts, this new model could give your score a meaningful boost.

Why a Higher Score Still Matters

The higher your credit score, the more loan programs you’ll qualify for—and the better terms you’ll get. That includes lower interest rates, smaller down payments, and fewer fees.

But a high score isn’t everything. “We look at the full picture,” says Erin. “Your income, debts, savings, and credit history all play a role. You don’t need perfect credit to buy a home.”

How to Improve Your Score Before Applying

If your score is borderline, a few smart moves can make a big difference:

• Pay down credit card balances to lower your credit utilization.

• Avoid opening new accounts or making big purchases during the loan process.

• Make every payment on time, especially in the months leading up to your application.

And if you're not sure where you stand, Erin recommends a quick pre-qualification check. “It’s the best way to see what’s possible and make a game plan,” she says.

The Bottom Line

In 2025, getting approved for a mortgage is more accessible than ever—especially with credit models that reward consistent financial habits. Whether your score is strong or still a work in progress, there’s likely a loan option that fits your needs.

Ready to explore your options? Erin Barrows can help you run the numbers and find the best path forward.

Sources: Experian.com, FreddieMac.com, NAR.realtor, Forbes.com