Credit: what lenders look for and how to improve your score

Typical minimum credit scores by loan type

These are program rules. Individual lenders often add stricter requirements (called “overlays”), so two lenders can give different answers. Shop more than one.

Other things lenders check

• Debt-to-income (DTI): your monthly debt payments (including the new mortgage) divided by gross monthly income. Fannie Mae allows up to 50% through its automated system and 36% (up to 45% with strong credit and reserves) when manually underwritten. FHA manual underwriting starts at 31% housing / 43% total and can go higher with compensating factors.
• Down payment: FHA 3.5% (580+ score); VA and USDA can be 0% for eligible buyers; conventional can be as low as 3% on certain programs. See Types of loans.
• Employment and income history: lenders generally look for stable, documented income—pay stubs, W-2s, and often two years of tax returns if you are self-employed.
• Reserves: savings left over after closing (often counted in months of mortgage payments). Some loans or higher DTIs require them.
• Credit history details: late payments, collections, bankruptcies, and foreclosures have waiting periods that vary by program.

12 practical ways to improve your credit

1. Pay every bill on time. Payment history is the biggest factor; set up autopay for at least the minimum.
2. Keep card balances low. Using under 30% of your limits helps; under 10% is better. Paying before the statement date lowers the balance that gets reported.
3. Don’t close old cards. Closing them shrinks your available credit and can shorten your history.
4. Check your reports free at AnnualCreditReport.com, the official site for free reports from Equifax, Experian, and TransUnion.
5. Dispute errors directly with the credit bureau and the company that reported it. You can do this yourself for free (CFPB guide).
6. Avoid new credit before and during your mortgage—no new cars, cards, or furniture financing until after closing.
7. Ask your lender about a rapid rescore. If you pay down a balance or fix an error, a lender can request an updated score in days instead of waiting a month.
8. Become an authorized user on a trusted family member’s old, low-balance, on-time card. Be aware some scoring and underwriting may weigh this less.
9. Deal with collections carefully. Ask for a written agreement before paying; get “paid” confirmation in writing.
10. Rate-shop in a short window. Mortgage inquiries made close together are usually treated as one for scoring.
11. Ask about a credit-builder loan or secured card if you have little or no credit history.
12. Be patient. Late payments fade in impact over time; steady on-time payments are what move the score.

Related: Types of loans & what underwriters expect · Closing costs · Affordability tools

Sources

1. Fannie Mae Selling Guide B3-5.1-01, General Requirements for Credit Scores
2. Fannie Mae: Desktop Underwriter credit risk assessment updates (no DU minimum score from Nov. 2025)
3. Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios
4. HUD Mortgagee Letter 2026-11 (FHA minimum decision credit score, LTV and qualifying ratios)
5. HUD Single Family Housing Policy Handbook 4000.1
6. VA.gov: VA home loan limits (“We don’t require a minimum credit score”)
7. USDA Rural Development HB-1-3555, Chapter 10: Credit Analysis
8. USDA Rural Development: Credit training notes (“no minimum published credit score, but many lenders do”)
9. FHFA: Conforming loan limit values for 2026
10. CFPB: What is a debt-to-income ratio?
11. CFPB: Credit reports and scores
12. AnnualCreditReport.com (official free credit reports)
13. CFPB: How do I dispute an error on my credit report?
14. CFPB: What is a credit repair company?