How Your Credit Score Affects Your AZ Mortgage Rate in 2026

When you apply for a mortgage, lenders look at what's called 'The 3 C's': Credit, Capacity (Income), and Collateral (the House). Of these, your credit score is the most critical factor in determining your interest rate.

Why Your Score Matters So Much

Your FICO score is a snapshot of your financial reliability. To a lender, a higher score means lower risk. To reward you for that low risk, they offer you a lower interest rate. A lower rate can save you tens of thousands of dollars over the life of your loan.

Minimum Credit Scores by Loan Type

While rates get better at higher tiers (e.g., 740+), these are the general minimums to qualify for different loan types:

• FHA Loans: 580 minimum (for 3.5% down payment).
• Conventional Loans: 620 minimum.
• VA Loans: While the VA has no official minimum, most lenders look for a 600-620 score.
• Jumbo Loans: 700+ minimum, as these are higher-risk loans.

How to Improve Your Score Quickly

If your score isn't where you want it to be, don't worry. The best things you can do are: pay every bill on time and pay down your credit card balances. Lowering your 'credit utilization' (the amount you owe vs. your limit) is the fastest way to boost your score. Also, don't close old credit card accounts, as the age of your credit history is also a positive factor.