Your credit score determines not just whether you can refinance — but how much you’ll pay for the privilege. A 760 vs. a 680 credit score can mean a 0.5–1.0% difference in interest rate, which on a $400,000 loan is $100–$200/month.
Minimum Credit Scores by Loan Type
| Loan Type | Minimum Score | Best Rate Threshold |
|---|---|---|
| Conventional | 620 | 740+ |
| FHA | 580 (3.5% down) | 680+ |
| VA | No minimum (lender varies, typically 620) | 720+ |
| Jumbo | 680–720 | 760+ |
How Much Does Score Matter?
Fannie Mae and Freddie Mac use “loan-level price adjustments” (LLPAs) that vary by credit score. A borrower with a 760 score gets meaningfully better pricing than one with a 680 — even with the same loan type and LTV.
Example on a $450,000 loan:
- 760+ score: 6.50% → $2,845/month
- 700–719 score: 6.875% → $2,958/month
- 660–679 score: 7.25% → $3,072/month
That’s a $227/month spread — $81,720 over 30 years — purely from credit score.
How to Improve Your Score Before Refinancing
- Pay down revolving debt — Credit utilization under 10% is ideal
- Don’t open new credit lines for at least 6 months before refinancing
- Dispute errors on your credit report — even one incorrect late payment can drag your score 40–50 points
- Don’t close old cards — length of credit history matters
- Become an authorized user on a spouse/family member’s old, well-managed card
When to Wait vs. Proceed
If your score is close to a threshold (say, 718 and the next tier starts at 720), it may be worth waiting 60–90 days to improve it before applying. We can help you decide whether the savings from waiting justify delaying.