✦ Key Takeaways
- FHA minimum: 580 (3.5% down) or 500 (10% down)
- Conventional minimum: 620; best rates at 740+
- Jumbo loans (SoCal luxury): Usually require 700+
- Every 20-point score increase can save $100–$200/month on your mortgage
- You can get pre-qualified with our partner iLoanCA — free, no credit pull
Credit Score Minimums by Loan Type
| Loan Type | Minimum Score | Best Rate Score | Common in SoCal? |
|---|---|---|---|
| FHA | 580 (3.5% down) / 500 (10% down) | 680+ | Common for entry-level |
| Conventional | 620 | 740+ | Most common |
| Jumbo | 700 | 760+ | Required above $1.1M |
| VA | No official min (lender sets ~580) | 680+ | For veterans |
How Credit Score Affects Your Interest Rate
Your credit score is the single biggest factor affecting your mortgage interest rate. Here's a real-world example on a $800,000 30-year mortgage in California:
| Credit Score | Rate (approx.) | Monthly Payment | 30-Year Total Interest |
|---|---|---|---|
| 760–850 | ~6.50% | $5,054 | ~$618,000 |
| 700–759 | ~6.75% | $5,189 | ~$668,000 |
| 660–699 | ~7.25% | $5,464 | ~$767,000 |
| 620–659 | ~7.75% | $5,732 | ~$863,000 |
The difference between a 760 score and a 660 score: $410/month — or $148,000 over 30 years. Worth spending a few months improving your score before buying.
How to Improve Your Credit Score Before Buying
Most credit score improvements take 30–90 days to show up. Here are the highest-impact actions:
- Pay down credit card balances. Aim for under 30% utilization on each card. Under 10% is ideal. This is the fastest way to boost your score.
- Don't open new credit accounts. Each new application causes a hard inquiry that temporarily drops your score by 5–10 points.
- Don't close old accounts. Length of credit history matters. Keep old cards open even if you don't use them.
- Dispute errors on your credit report. Get free reports at AnnualCreditReport.com. Errors are common and can be removed.
- Become an authorized user. If a family member has a long-standing card with low utilization, being added can boost your score.
What Lenders Check Beyond Your Score
Your credit score is important, but lenders also review:
- Debt-to-income ratio (DTI): Total monthly debts divided by gross monthly income. Most lenders want under 45%.
- Employment history: 2 years at same employer (or same industry) is preferred.
- Cash reserves: Lenders want to see 2–6 months of mortgage payments in savings after closing.
- Payment history: No late payments in the last 12 months is critical.
Yes — with an FHA loan at 3.5% down. However, you'll pay mortgage insurance for the life of the loan and get a higher interest rate. If you have a few months to improve your score to 640–680, you'll save substantially over the life of the loan.
A soft pre-qualification (like through iLoanCA) does NOT impact your score. A full mortgage application with a hard pull will temporarily reduce your score by 5–10 points, but multiple mortgage inquiries within a 45-day window are treated as a single inquiry.
Bottom Line
A 740+ credit score gets you the best rates on a SoCal home purchase. If you're below 680, a few months of focused improvement can save you hundreds per month. Get a free soft pull pre-qualification through iLoanCA — no impact to your score.
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