I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. Call (800) 239-1103.
Your credit score is one of the most important factors in getting approved for a mortgage — and it directly affects your interest rate. If you’re buying your first home in California, here’s exactly what credit score you need, and what to do if you’re not there yet.
Minimum Credit Scores by Loan Type
| Loan Program | Minimum Credit Score | Notes |
|---|---|---|
| FHA Loan | 580 (3.5% down) / 500 (10% down) | Most flexible option for lower scores |
| Conventional Loan | 620 | Better rates start at 740+ |
| VA Loan | 580–620 (varies by lender) | No VA minimum; lenders set own floor |
| USDA Loan | 640 | Rural California properties |
| CalHFA Programs | 660 | Required for down payment assistance |
| Jumbo Loan | 680–720 | Loan amounts above the conforming limit ($832,750 in most CA counties for 2026) |
These are minimums. Lenders often add their own “overlays” — additional requirements on top of the program guidelines. As a mortgage broker, I shop your application across 40+ wholesale lenders to find the one with the most favorable terms for your specific credit profile.
How Your Credit Score Affects Your Mortgage Rate
In California’s market, the difference between a 620 and a 760 credit score can mean a significantly higher interest rate on the same loan. On a $700,000 mortgage, that gap can add hundreds of dollars per month — and tens of thousands over the life of the loan.
Fannie Mae’s Loan-Level Pricing Adjustments (LLPAs) create a tiered pricing system. The major credit score breakpoints to be aware of: 760+ gets the best available rates with minimal pricing adjustments; 740–759 is near-best; 720–739 is slightly higher; 700–719 sees a moderate pricing adjustment; 680–699 sees a noticeable rate increase; and 620–679 carries a significant rate increase where it may be worth spending 3–6 months improving before applying.
What Counts in Your Credit Score (FICO)
Mortgage lenders use FICO scores (not VantageScore). Your FICO score is calculated from payment history (35%) — on-time vs. late payments, the single biggest factor; amounts owed and credit utilization (30%) — keep card balances below 30% of limits, ideally below 10%; length of credit history (15%) — older accounts help, so don’t close old cards; new credit (10%) — recent hard inquiries and new accounts, avoid opening new credit in the months before applying; and credit mix (10%) — having both installment loans and revolving credit is slightly better.
How to Improve Your Credit Score Before Applying
Quick wins in 1–3 months: pay down credit card balances (reducing utilization can raise your score 20–50 points relatively quickly), become an authorized user on a family member’s account with good credit and low utilization, and dispute any errors at AnnualCreditReport.com — incorrect late payments, accounts that aren’t yours, wrong balances.
Medium-term improvements over 3–12 months: never miss a payment (even one 30-day late can drop your score 50–100 points), keep old accounts open even if unused, and limit hard inquiries. Multiple mortgage inquiries within a 45-day window count as one for FICO scoring purposes — so shopping multiple lenders won’t hurt you.
Which Credit Score Do Mortgage Lenders Use?
Mortgage lenders pull your credit from all three bureaus — Experian, Equifax, and TransUnion — and use the middle score of the three. If you have a co-borrower, lenders use the lower of the two middle scores. This matters: if one spouse has a 760 and the other has a 640, the lender uses 640. In that case, it often makes sense to apply with just the higher-scoring borrower — provided their income alone qualifies for the loan amount you need.
FHA Loans: The Best Option for Lower Credit Scores
FHA loans are insured by the Federal Housing Administration and designed to help buyers with less-than-perfect credit. Key advantages for California buyers: 580 credit score qualifies for 3.5% down; 500–579 can still qualify with 10% down; higher debt-to-income ratios are allowed compared to conventional loans; 2026 FHA loan limits reach as high as $1,249,125 in California’s most expensive counties; and collections and charge-offs don’t automatically disqualify you.
No Credit History? Here’s What to Do
If you have no credit score, you’re not out of options. Some lenders offer manual underwriting using non-traditional credit references: 12 months of on-time rent payments, utility bills, phone bills, or insurance payments can substitute for a traditional credit score on FHA loans. This is common for recent immigrants and younger buyers entering the market for the first time.
Frequently Asked Questions
What is the minimum credit score to buy a house in California?
The minimum credit score depends on the loan program. FHA loans allow a 580 score with 3.5% down (or 500 with 10% down). Conventional loans require at least 620, though you’ll need 740+ for the best rates. VA loans have no official minimum but most lenders set a floor around 580–620. CalHFA down payment assistance programs require a 660 minimum. Jumbo loans typically require 680–720. As a broker, I work across 40+ lenders to match your credit profile to the right program.
How much does credit score affect mortgage rate in California?
Significantly. Fannie Mae’s Loan-Level Pricing Adjustments (LLPAs) create a tiered system where lower scores result in higher rates or higher upfront fees. The gap between a 620 and a 760 score can mean a materially higher interest rate — which on a large California mortgage translates to hundreds of dollars more per month. In some cases it pays to wait 3–6 months and improve your score before applying, especially when you’re near a key breakpoint like 680, 720, or 740.
Does getting pre-approved hurt my credit score?
A mortgage pre-approval requires a hard credit inquiry, which typically reduces your FICO score by 2–5 points. However, FICO’s rate-shopping rules treat multiple mortgage inquiries within a 45-day window as a single inquiry — so getting pre-approved by multiple lenders to compare rates counts as one hit, not several. The effect is also temporary and typically fades within a few months. The benefit of securing a good rate almost always outweighs the minor, short-term score dip.
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
