What a 620 score means
Credit scores usually run from 300 to 850. A 620 sits in the fair range. It's high enough for many home loans, but lenders see it as more risk than a score in the 700s. That shows up in your rate, your mortgage insurance and, sometimes, how much down payment or savings a lender wants to see.
CapCenter loans need a credit score of at least 620. Higher scores can unlock better rates.
Loan options to compare
Each loan type treats a fair score differently. A loan consultant can price more than one so you can compare.
- Conventional: 620 is a common minimum. Pricing and private mortgage insurance (PMI) cost more at this level, but PMI can usually come off later as you build equity.
- FHA: often easier to qualify for with fair credit, with a 3.5% minimum down payment. FHA loans carry mortgage insurance, and it usually stays unless you refinance.
- VA: for eligible service members, veterans and some surviving spouses. VA allows 0% down. Credit standards vary by lender.
What it may cost you
With a 620 score, expect a higher rate than a buyer with a 760, and a higher monthly PMI cost on a conventional loan with less than 20% down. Over many years, those differences add up. That's why it's worth comparing FHA and conventional side by side. FHA can cost less at lower scores in some cases, while conventional often costs less over time once your credit improves.
Ways to lift your score before you apply
Even a small bump can move you into a better pricing tier. A few steps that often help:
- Pay credit card balances down well below their limits. Many people aim for under 10%.
- Pay all your bills on time from here on.
- Check your credit reports for errors and dispute anything that's wrong.
- Avoid opening new credit accounts in the months before you apply.
- Keep older accounts open, since they help your credit history.
Other things lenders look at
Your score is only one piece. Lenders also review your debt-to-income ratio, steady income, savings left after closing, and the size of your down payment. Strength in these areas can help balance a fair score. Paying off a car loan or a card can help both your score and your debt-to-income at once.
Applying with a co-borrower
Adding a co-borrower can add income to your application. But lenders often price the loan using the lower of the borrowers' scores, so a co-borrower with strong credit may not lower your rate. Ask your loan consultant how it would work for your loan.
Start with a soft credit check
A CapCenter loan consultant can review your options with a soft credit check, which doesn't affect your score. If you're close to a better pricing tier, they can help you decide whether to apply now or work on your credit first.