Your credit score is one of the first things a mortgage lender looks at. It affects whether you get approved, what interest rate you receive, and how much you pay over the life of your loan. If you are planning to buy a home in the Triangle in 2026, here is exactly what you need to know about credit scores and how they affect your mortgage.
Different loan programs have different minimum requirements. Here is the breakdown for the most common loan types used by buyers in North Carolina.
Conventional
620 minimum
Most lenders prefer 660+ to offer competitive rates. The most common loan type for buyers with stable income and solid credit history.
FHA
580 minimum
As low as 580 with 3.5% down. Between 500 and 579, some lenders approve with 10% down. Popular with first-time buyers.
VA
580–620 typical
No official VA minimum, but most lenders require 580–620. No down payment required for eligible veterans and service members.
USDA
640 typical
For eligible rural and suburban properties. Parts of Johnston, Chatham, and other areas near the Triangle may qualify.
Conventional loans require a minimum score of 620, though most lenders prefer 660 or higher to offer competitive rates. Conventional loans are the most common loan type for buyers with stable income and solid credit history.
FHA loans allow scores as low as 580 with a 3.5% down payment. If your score is between 500 and 579, some lenders will still approve you but require a 10% down payment. FHA loans are popular with first-time buyers because of the lower score threshold and down payment flexibility.
VA loans do not have an official minimum credit score set by the VA, but most lenders require at least 580 to 620. VA loans are available to eligible veterans, active-duty service members, and surviving spouses, and they require no down payment.
USDA loans, which apply to eligible rural and suburban properties in NC, typically require a minimum score of 640. Parts of Johnston County, Chatham County, and other areas near the Triangle may qualify.
Getting approved is only part of the picture. Your credit score has a direct impact on the interest rate you are offered, and even a small rate difference adds up significantly over a 30-year mortgage.
As a general example, a buyer with a 760 score might receive a rate that is 0.5% to 1% lower than a buyer with a 660 score on the same loan. On a $400,000 mortgage, a 0.75% rate difference translates to roughly $175 more per month and over $60,000 more in interest over 30 years. Your credit score is worth real money.
The Cost of a Lower Score
Example loan
$400,000
Rate difference
0.75%
Extra interest over 30 yrs
$60,000+
Your FICO score is calculated from five factors. Understanding them helps you know where to focus if you need to improve your score before buying.
Payment History
35%Paying every bill on time, every month, is the single most impactful thing you can do for your credit.
Amounts Owed (Utilization)
30%Keeping your credit card balances below 30% of your credit limits helps significantly. Below 10% is even better.
Length of Credit History
15%The longer your accounts have been open and in good standing, the better.
Credit Mix
10%Having a mix of revolving credit (credit cards) and installment loans (car loan, student loan) is a positive signal.
New Credit Inquiries
10%Every hard inquiry from a new credit application temporarily lowers your score slightly. Avoid opening new accounts in the months before applying for a mortgage.
If your score is not where you want it, here are the most effective moves to make before applying for a mortgage.
Pay down credit card balances
Getting your utilization below 30% can move your score meaningfully within one to two billing cycles.
Do not close old accounts
Closing a credit card reduces your available credit and can hurt your utilization ratio. Leave old accounts open even if you are not using them.
Dispute errors on your credit report
Pull your free reports at annualcreditreport.com and check all three bureaus (Equifax, Experian, TransUnion) for errors. Disputed and corrected errors can improve your score quickly.
Become an authorized user
If a family member with excellent credit adds you as an authorized user on their account, their positive history can boost your score.
Avoid applying for new credit
Hold off on new credit cards, car loans, or any other credit applications for at least six months before buying a home.
Small improvements can happen in one to three months. Getting from a 580 to a 660 may take six months to a year of consistent, disciplined credit behavior. Getting from a 620 to a 740 could take one to two years. If your score needs significant work, start now and use that time to save a larger down payment as well.
A lot of buyers disqualify themselves before ever talking to a lender. Your score may be higher than you think, or you may qualify for a program with more flexibility than you expected. A good lender will also give you a roadmap for what needs to happen to get you qualified if you are not there yet.
At Jon Tennant Real Estate and Business Brokerage, we connect buyers with lenders who know the Triangle market and can work with a range of credit situations. Reach out and we will point you in the right direction.
Reach out for a confidential conversation. I will connect you with lenders who know the Triangle market and can work with a range of credit situations — then help you map out a plan to buy.