Credit Scoring Is Changing: 3 Things Homebuyers Should Know

Quick question: what credit score does it take to buy a home? If a number comes to mind, there is a good chance it is too high. And the real answer is getting harder to pin down, because the way credit scores are calculated and used for mortgages is changing.

Here are three things every would-be buyer should understand about credit right now, and what to do about them.

1. Most People Are Guessing, and Guessing High

Fannie Mae has been tracking what consumers believe about mortgage requirements since 2015, and it has consistently found that people overestimate the minimum credit score lenders require. In its research, the average guess was 652.

The long-standing benchmark for loans backed by Fannie Mae and Freddie Mac has been lower, at 620. And even that is no longer a hard floor for every loan. In November 2025, Fannie Mae removed the 620 minimum for loans run through its Desktop Underwriter system, relying instead on its broader risk assessment. Individual lenders, loan programs, and mortgage insurers can still set their own minimums.

Newer research shows the same pattern. A 2026 survey from Veterans United found many would-be buyers still overestimate what it takes to qualify (see graphic below):

Guessing wrong has a real cost. A renter who assumes their score is too low may never take the step of finding out for sure, and that can delay a purchase for years longer than necessary.

2. The Credit Rules Are Changing

For decades, the mortgage industry relied on one family of scores, often called Classic FICO. To encourage competition and expand access, the Federal Housing Finance Agency (FHFA) has approved newer models for loans backed by Fannie Mae and Freddie Mac, including FICO 10T and VantageScore 4.0.

A different model can produce a different number for the same person. VantageScore says its model can score about 33 million adults that Classic FICO cannot. That means the score on a free app may not be the score a lender actually uses, and two lenders may not use the same model at all.

The practical lesson: a credit score is not one fixed number. The only score that matters for a mortgage is the one a specific lender pulls, using the model that lender relies on.

3. The Fundamentals Have Not Changed

New models may weigh information differently, but the habits that help a credit profile are the same under all of them (see checklist below):

• Pay every bill on time. Payment history carries heavy weight in every major model.
• Keep balances low. Using a smaller share of available credit generally helps.
• Avoid opening several new accounts at once, especially in the months before applying for a mortgage.
• Check reports for errors and dispute anything that is wrong.

One common worry deserves a direct answer. Shopping for a mortgage does not have to damage a score. Credit scoring models generally treat multiple mortgage inquiries within a short window as a single inquiry, so comparing lenders over a few weeks is usually far less costly than people fear. A loan officer can confirm how that works for the models in use.

A Score Affects the Cost, Not Just the Approval

Qualifying is only the first question. A credit score also helps determine the interest rate a lender offers and, on many loans with less than 20% down, the cost of mortgage insurance. Two buyers approved for the same loan can end up with meaningfully different monthly payments because their scores fall in different pricing tiers. That is why a few months of improvement before applying can pay off for years.

It also helps to remember what a score does not measure. Lenders still look closely at income, existing debt payments, the size of the down payment, and cash left over after closing. A strong score cannot fully offset a debt load that is too high, and a modest score is not always the deciding factor if the rest of the file is solid. Seeing the whole picture is what makes a loan officer conversation more useful than any single number.

How To Use This Before House Hunting

Credit belongs at the start of the buying process, not the middle. Starting with a loan officer conversation shows where a buyer actually stands, which model and score matter, and whether a few months of focused effort could improve the rate or loan options available. That turns a guess into a plan.

Munkel Real Estate Solutions encourages buyers to have that conversation early because the home search goes better when the budget is real. Credit and loan questions belong with a qualified loan officer. The real estate side of the work is matching the search, timing, and strategy to what the financing actually supports.

Bottom Line

Credit requirements are often lower and more flexible than people assume, and the models behind them are changing. Do not make homebuying decisions from a chart, an app, or a friend's advice. A conversation with a loan officer can show whether owning a home is closer than it seems.

Sources: Fannie Mae; Freddie Mac; Federal Housing Finance Agency (FHFA); VantageScore; Veterans United Home Loans.