Refinancing your mortgage can be a smart move—lowering your interest rate, reducing your monthly payment, tapping into equity, or shortening your loan term. But one of the most important factors in determining whether you can refinance—and what kind of deal you’ll get—is your credit score.
At CapCenter, we offer Zero Closing Cost refinance loans, which already save you thousands upfront. But even with that massive savings advantage, your credit profile still plays a key role in your refinancing journey. So let’s break down what credit score you actually need to refinance, how it affects your options, and what you can do to improve your odds of approval and better rates.
Why Your Credit Score Matters When Refinancing
Your credit score tells lenders how likely you are to repay debt based on your past financial behavior. Mortgage lenders use this score—along with other factors like income, assets, and property value—to assess your risk level.
When refinancing, your score directly influences:
- Whether you qualify for a refinance at all
- The interest rate you’re offered
- Your loan program eligibility (conventional vs. FHA, for example)
- How much equity you can access if you’re doing a cash-out refinance
Even with CapCenter’s no lender fees and zero closing cost model, your credit score still determines how low of a rate you’ll be able to secure.
Minimum Credit Scores for Different Refinance Types
There’s no one-size-fits-all credit score requirement—it depends on the type of loan you’re applying for, the lender’s criteria, and the purpose of the refinance. Here’s how it typically breaks down:
Conventional Refinance
For most conventional refinance loans (backed by Fannie Mae or Freddie Mac), the minimum credit score is 620. However, that’s the floor—not the ideal. A score of 740 or higher will qualify you for the best rates.
That said, CapCenter works with homeowners in a wide range of credit scenarios and offers personalized rate quotes so you can see where you stand. Even clients with scores in the mid-600s often see meaningful monthly savings when refinancing.
FHA Refinance
If you currently have an FHA loan or are switching into one, you may be able to refinance with a credit score as low as 580—and in some cases, even lower with compensating factors.
FHA Streamline refinances (a special program for current FHA borrowers) often don’t require a new appraisal or income verification, and the credit score requirements are typically more flexible.
CapCenter currently focuses on conventional refinance products, but if FHA refinancing is a better fit for your situation, our team will point you in the right direction or refer you to the best available solution.
VA Refinance
For qualified veterans or active-duty service members, VA Interest Rate Reduction Refinance Loans (IRRRLs) are one of the most flexible refi options available.
There’s no official minimum credit score required by the VA, though many lenders—including CapCenter—look for a score of 620 or higher. These programs don’t require an appraisal or income documentation, making them streamlined and accessible if you already have a VA loan.
Cash-Out Refinance
Want to tap into your home equity? Cash-out refinances typically have stricter credit requirements than rate-and-term refinances because the lender is taking on more risk.
In most cases:
- Conventional cash-out loans require a minimum score of 620, but many lenders look for 660 or above.
- To qualify for better rates or higher loan-to-value ratios, you’ll often need a score of 700+.
- If you’re pulling significant equity out, underwriters will place even more weight on your score and overall financial profile.
CapCenter offers cash-out refinances with ZERO closing costs, helping you retain more of the equity you’ve built—without sacrificing thousands in fees.
Credit Score Tiers and What They Mean for Refi Rates
Let’s look at how credit score “bands” can affect your rate when refinancing. These ranges are common industry benchmarks:
- 760 and above – Excellent credit: Best rates and widest eligibility
- 700–759 – Very good credit: Competitive rates
- 660–699 – Good credit: Slightly higher rates but still eligible for refinancing
- 620–659 – Fair credit: Higher rates, but still potentially worthwhile depending on the spread
- Below 620 – Subprime: Limited refinance options; may need to explore FHA or wait and improve score
For example, the difference between a 660 and 740 score could mean a quarter of a percent in rate—or more. That adds up over a 30-year loan. But even if your score isn’t perfect, refinancing can still make sense, especially if:
- You’re currently paying a much higher rate than today’s market
- You plan to stay in the home for many more years
- You’re looking to consolidate higher-interest debt via cash-out
What Lenders Look For Beyond Your Score
While your credit score is a big piece of the puzzle, it’s not the only thing lenders evaluate during a refinance.
Here’s what else matters:
- Loan-to-Value Ratio (LTV): How much equity you have. CapCenter’s refinances typically max out around 80% LTV for best pricing.
- Debt-to-Income Ratio (DTI): Your monthly debts relative to your income. Lower DTIs make you a stronger applicant.
- Payment history: A single recent late mortgage payment can derail a refinance.
- Income and employment stability: Most refinances require steady employment and verifiable income, though some streamlined programs (like VA IRRRL) are exceptions.
So even if your score is borderline, strong income, solid equity, and no missed payments may still qualify you.
How to Check (and Improve) Your Credit Before Refinancing
Before you apply to refinance, it’s a good idea to check your credit score and review your report for accuracy. You can access free credit reports from all three bureaus at AnnualCreditReport.com. Some banks or credit card issuers also offer free score monitoring.
To improve your score before refinancing:
- Pay down credit card balances. Utilization rate makes up a major part of your score.
- Avoid applying for new debt right before your refinance.
- Catch up on any late payments. A 30-day delinquency can tank your score.
- Don’t close old accounts. Your average age of credit matters.
- Dispute any errors on your credit report promptly.
Small changes can have a big impact. Raising your score just 20–30 points could unlock better loan terms and save thousands over the life of your loan.
When Is the Best Time to Refinance?
Credit score aside, timing your refinance around favorable market conditions can also boost your savings. Consider refinancing when:
- Mortgage rates drop well below your current rate
- Your home value has increased, improving your loan-to-value ratio
- Your credit score has improved, making you eligible for better terms
- You want to switch from an ARM to a fixed-rate loan, or shorten your loan term
CapCenter’s ZERO Closing Cost refinance loans make it easier to take advantage of these opportunities—without worrying about whether it’s “worth it” after paying thousands in fees.
If you’re ready to explore your options, you can get a free rate quote in minutes with no hard credit pull. You’ll see what’s possible based on your current credit profile and goals.
CapCenter’s Advantage: ZERO Closing Cost Refinancing
Let’s be blunt: traditional refinance lenders can hit you with $5,000 to $10,000 in closing costs—even if you qualify for a great rate. Those costs eat into your equity and delay your break-even point.
CapCenter is different.
We pioneered the ZERO Closing Cost mortgage, helping homeowners refinance without paying lender fees, appraisal costs, title charges, or attorney fees out of pocket. That’s what we’re best known for—and why thousands of clients trust us to help them lower their payment or access home equity.
When you refinance with CapCenter:
- You keep your savings instead of spending it on fees
- You get transparent quotes with no surprises
- You work with an experienced, in-house team that makes the process seamless
- You don’t need to stress about “rate shopping fatigue” because our quotes are real and honest from the start
If your credit score is good enough to refinance—and you want to avoid unnecessary costs—start your quote here.
FAQs: Credit Score & Refinancing
What’s the minimum credit score for a refinance?
Most conventional refinances require a 620 score. FHA refinances may allow scores as low as 580. For better rates, aim for 700+.
Can I refinance with bad credit?
You may still qualify, especially if you have equity, stable income, and a good payment history. Your rate will likely be higher, and some loan options may not be available.
Does refinancing hurt your credit?
A refinance may temporarily lower your score due to the credit inquiry and new loan account. But over time, making on-time payments can help your credit recover—and even improve.
Will my spouse’s credit score matter?
Yes, if you’re applying jointly. Both scores will be reviewed, and most lenders use the lower of the two when pricing the loan.
Can I refinance to remove a co-borrower with bad credit?
Yes—refinancing is the only way to remove someone from the loan. You’ll need to qualify on your own income and credit.
Bottom Line
Your credit score plays a crucial role in refinancing your mortgage—but it’s not the only factor, and it doesn’t need to be perfect to benefit. With CapCenter’s Zero Closing Cost refinance loans, you can focus on saving money each month without draining your bank account upfront.
If you’re not sure whether you qualify, or want to understand how your score impacts your options, reach out to our team or start your free quote online. We’ll help you run the numbers—and if refinancing makes sense, we’ll make it easy.
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