Understanding Credit Score Requirements in 2025

If you’re thinking about buying a home this year, one of the first questions you’re probably asking is: "What credit score do I need to qualify for a mortgage?"

According to Josh Franklin, a seasoned loan officer at loanofficerjosh.com, understanding your credit profile is one of the most important first steps you can take when preparing to buy.

Minimum Credit Scores by Loan Type

Here’s a quick breakdown of what lenders typically look for in 2025:

• Conventional Loans: A minimum score of 620 is generally required. These loans offer competitive terms but expect a stronger credit profile.

• FHA Loans: These government-backed loans allow for more flexibility, requiring just a 580 score with a 3.5% down payment.

• Lower FHA Options: If you can put 10% down, FHA may approve borrowers with scores as low as 500.

"Your credit score sets the tone for your loan options," Josh explains. "But it’s not just about qualifying—it can also impact your rate and fees."

What’s Changing in 2025: VantageScore 4.0

This year, a big shift has occurred in how lenders evaluate credit.

Fannie Mae and Freddie Mac have adopted the VantageScore 4.0 model. Unlike older scoring systems, this new model takes into account:

• On-time rent payments

• Utility bills

• Phone and internet bills

This is a major advantage for renters or first-time buyers who may not have much traditional credit history.

"It’s a game-changer," says Josh Franklin. "If you've been responsibly paying your bills—even if they're not credit cards—it can now help you qualify for a home."

Why Credit Still Matters

While more inclusive models are a win for many buyers, the fundamentals haven’t changed: higher scores lead to better terms.

• Lower interest rates

• Easier approval processes

• Fewer conditions during underwriting

That said, Josh emphasizes that you don’t need perfect credit to move forward. "There are plenty of options for buyers with average credit. You just need the right guidance."

Tips to Improve Your Score Before You Apply

If you’re planning to buy in 2025, here are some smart steps to take:

• Pay down credit card balances below 30% of your limit

• Avoid missed or late payments on all accounts

• Don’t open new lines of credit right before applying

• Review your credit reports early to fix any errors

And if you're a renter, consider using a rent-reporting service to make sure your on-time payments count.

Next Steps

Whether you're just getting started or ready to get pre-approved, Josh Franklin can help you understand where your credit stands and what loan programs fit your situation.

"Let’s run the numbers together and build a plan that makes sense for you," he says.

Sources: Experian.com, FannieMae.com, HUD.gov, NAR.realtor