Credit Score Tips for Homebuyers in 2026

Your credit score is still one of the clearest signals lenders use when evaluating a home loan, but in 2026 it is no longer the whole story. Mortgage underwriting is moving away from a single, rigid score threshold and toward a broader view of repayment behavior, especially for conventional loans evaluated through automated underwriting.

That shift matters for first-time buyers, move-up buyers, refinance borrowers, and homeowners considering equity access. It also matters if you have a thinner credit file, a few older blemishes, or strong rent-payment habits that traditional mortgage scoring did not always capture well. Fannie Mae’s 2025 update removed the longstanding minimum score requirement for Desktop Underwriter casefiles, and its current Selling Guide says DU loan casefiles do not require a minimum credit score even though manually underwritten loans and many government-backed loans still do. Fannie Mae’s announcement and the current Selling Guide section on credit scores make that distinction explicit.

For borrowers, the practical takeaway is simple: do not treat mortgage approval as a one-number test, but do not ignore your score either. A stronger score can still improve the options available to you, influence pricing, and make it easier to qualify across more loan types. If you want a broader look at how scoring itself is changing, Secured Funding’s guide on why one score may no longer decide is a useful companion to this one.

Why credit scores still matter, even after the “below 620” headlines

The biggest recent headline is real: Fannie Mae removed the minimum credit score requirement for loans submitted through DU, with the change implemented for new casefiles created on or after mid-November 2025. But that does not mean scores stopped mattering, and it definitely does not mean every borrower below 620 will qualify. Fannie Mae’s SEL-2025-09 update says DU will now rely on a “comprehensive analysis of risk factors,” and the current Selling Guide language says the same in plainer policy terms.

That distinction is important because many borrowers hear “no minimum” and assume “easier approval.” In practice, automated underwriting can still decline a file if the overall risk picture is too weak. A lower score may be workable in some cases, but usually only when the rest of the application shows meaningful strengths, such as stable income, manageable debt, cash reserves, or a stronger down payment profile.

The rules also differ by loan path. Fannie Mae’s current credit score requirements page says manually underwritten fixed-rate loans still have a minimum score threshold, with a higher threshold for ARMs, and the same page says mortgage loans insured or guaranteed by federal agencies such as FHA, VA, and USDA/RD generally require a minimum representative credit score of 620 under Fannie Mae delivery standards. So even in a more flexible scoring environment, product choice still matters.

This is where nuance beats headlines. A borrower with a score below 620 may have a path through automated underwriting on a conventional loan, while another borrower with the same score may be better served by waiting, reducing balances, or exploring a different program structure. Secured Funding already covered the policy change directly in Fannie Mae’s big update: you may qualify even with a credit score below 620; the fresh angle here is what you should *do* with that information.

What mortgage credit scoring is changing in 2026

Mortgage credit scoring is in the middle of a structural transition, not just a minor tweak. Fannie Mae says it is implementing a more modern credit score framework that includes Classic FICO, VantageScore 4.0, and FICO 10T, while its Credit Report and Credit Score Model Playbook outlines the move away from the traditional tri-merge setup toward bi-merge reporting and a new loan-level average score calculation.

That modernization is broader than Fannie Mae alone. The Federal Housing Finance Agency approval of VantageScore 4.0 ended Classic FICO’s exclusive position for GSE-backed mortgage underwriting, and subsequent industry reporting on HUD and FHFA’s rollout plans indicates lenders can now use VantageScore 4.0, with FICO 10T expected to become part of the landscape as implementation continues.

Why does that matter to a homebuyer? Because newer models may evaluate credit behavior differently than the older mortgage scores many borrowers have heard about for years. In particular, coverage of the transition notes that newer models can incorporate rent and utility payment history where that data is available and properly reported, which may help borrowers with responsible habits but thinner traditional files. That does not erase late payments, collections, or high utilization, but it can change how a borderline file is viewed over time. The ABA summary of the HUD/FHFA plans highlights that potential.

The practical problem is that many borrowers are looking at consumer scores on free apps and assuming those are the exact scores their lender will use. Often they are not. Mortgage underwriting may use different score versions, different repository data, and different merge methods than what you see on a dashboard. If you want a plain-English breakdown of the difference, Secured Funding’s FICO Score vs. VantageScore guide can help you interpret why the number on your phone and the number in a mortgage file may not match.

The credit habits that usually move the needle before you apply

If you have three to twelve months before buying, the highest-value credit improvements are usually the least exciting ones. Mortgage scoring still rewards consistency more than hacks. That means paying every account on time, reducing revolving balances, avoiding fresh derogatory items, and keeping your credit profile stable long enough for updated reporting to show through.

1. Protect your payment history first

A single recent late payment can do more damage than many borrowers expect, especially if your profile was otherwise clean. Payment history remains the backbone of credit evaluation across scoring models, and mortgage underwriting also looks beyond the score itself to the underlying report. If a lender sees recent missed payments, that may raise questions about current financial stress even if the score has partly recovered.

This is why “catching up later” is not a great plan when a home purchase is near. If cash is tight, preserving on-time payments on every open account is usually more valuable than trying to optimize smaller scoring details. A borrower who pays down cards but adds a new late mark may end up worse off than one who improves more slowly but keeps a clean recent history.

2. Lower revolving utilization, especially on credit cards

High card balances relative to your limits can suppress scores quickly, even when you have never missed a payment. Revolving utilization is one of the few factors that can improve relatively fast because card issuers update balances regularly. If you are carrying balances, paying them down before the statement closes can sometimes help more than paying after the balance has already been reported.

There is also a mortgage-specific reason this matters: lower card balances may help both your score and your debt-to-income ratio. That dual benefit is one reason utilization reduction is often the most efficient pre-approval move for borrowers who cannot change much else in the short term.

3. Do not open or close accounts casually

A common mistake is opening store cards for discounts, financing furniture before closing, or consolidating debt without understanding the timing. New accounts can create hard inquiries, reduce average account age, and introduce new required payments. Closing older accounts can also backfire if it shrinks available credit and pushes utilization higher.

This is especially relevant once you start rate shopping for a mortgage. You may be comparing lenders, but you should usually avoid adding unrelated credit activity at the same time. The goal is a stable, understandable file.

4. Fix errors early, not the week before pre-approval

Credit report disputes can be worthwhile, but they are not always fast. If an account is clearly inaccurate, starting the correction process early gives time for the bureaus and furnishers to investigate and update the file. Waiting until you are under contract can create avoidable stress, especially if a disputed item affects both your score and underwriting documentation.

5. Be careful with “quick fix” strategies

Some tactics that sound smart online are unpredictable in mortgage timing. Becoming an authorized user, settling old debts without understanding how they will report, or using aggressive credit-repair services can produce mixed results. The issue is not that these moves never help; it is that they may help slowly, help unevenly, or create underwriting questions if done right before application.

A good rule of thumb is to prioritize changes that improve both the score and the story behind the score. On-time payments, lower balances, and fewer surprises tend to do both.

If your score is below where you want it, where should you focus first?

When borrowers ask, “What score do I need?” the better question is often, “What is the weakest part of my file?” A score is a summary, but underwriting decisions are built from the details underneath it. If your timeline is short, you usually get better results by targeting the biggest drag on the file rather than trying to improve everything at once.

Here are the areas that usually deserve attention first:

• Recent late payments: These can signal current instability, which matters more than older, isolated issues. If you have them, the first job is to stop the pattern immediately.

• High revolving balances: These are often among the fastest issues to improve because updated lower balances may be reflected on upcoming reporting cycles.

• Collection or charge-off errors: Not every negative item is inaccurate, but when one is, correcting it can matter materially for both score and underwriting review.

• Too many new accounts or inquiries: Shopping for a mortgage is one thing; stacking new consumer credit on top of it is another. Keep the file quiet while you prepare.

• Thin credit history: In a modern scoring environment, consistent rent or utility reporting may become more relevant where available, but you still want documented, stable repayment behavior across tradelines when possible.

There is also a tradeoff question here: should you wait to buy? Sometimes yes. If paying down cards over the next few months could materially strengthen both your score and your monthly obligations, waiting may improve your options. But if home prices, inventory, lease timing, or life circumstances matter more, it may make sense to move forward and let the lender evaluate whether compensating factors can offset a weaker score.

That is especially true for borrowers comparing products. A conventional loan run through DU may evaluate risk differently than a manually underwritten loan or a government-backed option. If you are also weighing product structure, Secured Funding’s guide to the five types of mortgage loans for homebuyers is useful context because the “best” credit strategy often depends on the loan path you are actually considering.

For homeowners, the same logic applies to refinances, cash-out transactions, and HELOC decisions. Your current score may influence not only eligibility but also which options remain practical. If that is your situation, HELOC vs. cash-out refinance: it’s not about the product—it’s about the timing adds a helpful decision framework.

How rent, utilities, and thinner files fit into the new scoring environment

One of the more promising changes in mortgage credit scoring is the possibility that consistent nontraditional payment behavior may count more than it used to. Fannie Mae’s modernization materials and industry coverage around VantageScore 4.0 and FICO 10T implementation point toward models that can use broader data patterns, while reporting on the HUD/FHFA rollout notes that rent and utility payments may help where available.

That matters most for renters who have been financially responsible but have not used much traditional credit. A first-time buyer who has paid rent on time for years may have more evidence of repayment ability than an older scoring framework captured. The key phrase, though, is where available. Rent and utility history does not help automatically; it generally needs to be reported in a way the scoring model can actually see.

This is also where expectations need to stay realistic. Reported rent history may strengthen a thin file, but it is not a magic override for recent delinquencies, maxed-out cards, or unstable income. Mortgage underwriting still looks at the whole file, and newer scoring models are designed to refine risk assessment, not remove it.

For buyers in Maryland, financial counseling can be a practical bridge between “I know I need to improve my credit” and “I have an actual plan.” The Maryland Office of Financial Regulation’s legal help and financial counseling page lists nonprofit and educational resources, including programs that may help prospective buyers build better budgeting and credit habits before they apply. That is especially useful for first-time buyers also exploring Maryland homebuyer grants and programs, where readiness matters as much as eligibility.

A real-world example: a renter with modest student debt, one credit card, and strong rent history may not need a dramatic score jump to become mortgage-ready. They may need a cleaner reporting pattern, lower card utilization, and time for updated data to season. That is a different problem from a borrower with multiple recent lates and heavy revolving debt, even if both start with similar scores.

How to prepare your credit in the 90 days before mortgage application

The final stretch before applying is less about dramatic improvement and more about avoiding self-inflicted damage. If you are within roughly 90 days of pre-approval, think in terms of preservation, cleanup, and documentation.

First, keep every existing account current. If there is any risk of a missed payment, automate minimums or create a payment calendar. A brand-new late mark this close to application can be far more harmful than a score that is merely average.

Second, work on balances, not account shuffling. Paying down revolving debt may help relatively quickly; moving debt around, opening promotional accounts, or closing old cards can create noise without solving the underlying issue. The same caution applies to large purchases. Financing a car, opening a furniture line, or taking on new installment debt right before a mortgage application can change both your score and your debt ratios.

Third, check your reports early enough to act. The Consumer Financial Protection Bureau is an authoritative source on credit reporting and dispute rights generally, and borrowers should review the actual tradelines and status details, not just the top-line score. What matters in mortgage underwriting is often the content of the report as much as the score derived from it.

Fourth, time lender shopping intelligently. Multiple mortgage inquiries made within the scoring window are generally treated more favorably than scattered applications over a long period, but the safest practical move is still to shop in a focused burst rather than dragging the process out. If you want a strategy lens on that process, Secured Funding’s how to secure the best mortgage rate in Maryland and benefits of working with a local mortgage broker both help frame what to compare beyond the headline quote.

Finally, match the credit plan to the loan purpose. A purchase, a rate-and-term refinance, a cash-out refinance, and an FHA 203(k) renovation loan can all place slightly different pressure on the file. If you are considering a fixer-upper, Secured Funding’s What is an FHA 203(k) loan? is worth reading because renovation financing adds layers beyond the score itself, including property and project considerations.

The bottom line for homebuyers and homeowners

The most useful way to think about mortgage credit in 2026 is this: your score still matters, but your credit behavior matters more. Fannie Mae’s removal of a hard minimum score for DU casefiles is a meaningful change, and the broader transition to VantageScore 4.0, FICO 10T, and updated credit reporting practices may help some borrowers whose financial habits were not fully captured by the older system. But the market has not become casual about risk.

For most borrowers, the winning playbook is still straightforward. Protect on-time payments, reduce card balances, avoid unnecessary new debt, correct real reporting errors, and give positive changes time to appear. If your score is lower than you want, focus less on gaming the number and more on strengthening the underlying file a lender will actually review.

And if you are deciding whether to buy now, refinance, tap equity, or wait, do not reduce the decision to a single score threshold. Loan type, debt-to-income ratio, reserves, property goals, and timing all matter alongside credit. A well-prepared file may open more paths than a headline ever will.

This article is for informational purposes only and is not a commitment to lend, an offer of credit, or a rate-lock. Not all applicants will qualify; terms vary by situation. Rates and pricing are subject to change with the market until locked. Secured Funding Corporation, NMLS #461947 — Equal Housing Lender. Licensed in CA, CO, DE, DC, FL, GA, MD, NC, PA, SC, and VA.