Refinance Credit Score Requirements: What You Need in 2026

Credit Score Minimums by Refinance Type

*Minimums vary by lender. Many lenders require higher scores than program minimums.

How Credit Score Affects Your Rate

Credit score is one of the most significant factors in your refinance rate. Here's how scores typically tier:

Rate Tier Breakdown

The Dollar Impact

Beyond Credit Score: Other Qualification Factors

Debt-to-Income Ratio (DTI)

Your DTI compares monthly debt payments to gross monthly income.

• Ideal: Under 36%
• Acceptable: 36-43%
• Maximum (with compensating factors): 43-50%

Formula: (All monthly debt payments ÷ Gross monthly income) × 100

Loan-to-Value Ratio (LTV)

LTV measures how much you owe versus your home's value.

• Rate-and-term refinance: Up to 97% LTV (conventional)
• Cash-out refinance: Up to 80% LTV (conventional)
• HELOC/HELOAN: Up to 80-90% CLTV

Lower LTV generally means better rates and easier approval.

Employment and Income

• Standard: 2 years employment history
• Same field: Job changes acceptable if same industry
• Self-employed: 2 years tax returns typically required
• Alternative documentation: Bank statement loans for self-employed

Cash Reserves

Lenders often want to see savings after closing:

• Minimum: 2 months of mortgage payments
• Strong: 6+ months of payments
• Helps offset: Lower credit scores or higher DTI

Low Credit Score? Options and Strategies

Programs for Lower Scores

FHA Refinance (580+)

• Lower minimum score than conventional
• More flexible DTI requirements
• Streamline option for existing FHA borrowers
• Trade-off: Mortgage insurance required

VA Refinance (Flexible)

• No official VA minimum score
• IRRRL (streamline) has relaxed requirements
• No mortgage insurance
• For eligible veterans and service members only

Non-QM Refinance (500+)

• Available for credit-challenged borrowers
• Bank statement documentation options
• Higher rates than conventional
• Require more equity (typically 20%+)

Wait and Improve Strategy

Sometimes the best option is improving your score before refinancing. Consider waiting if:

• You're close to a rate tier threshold (e.g., 738 → 740)
• Recent credit events are about to age off (7 years for most negatives)
• You can pay down credit cards significantly in 2-3 months
• The rate improvement would be substantial (0.5%+)

Quick Credit Score Improvements (30-60 Days)

High-Impact Actions

1. Pay down credit card balances to under 30% utilization

   Utilization is a major factor. Under 10% is even better.

2. Request credit limit increases (without new inquiry)

   Improves utilization ratio without paying down balance.

3. Dispute errors on credit reports

   Get free reports at annualcreditreport.com and dispute inaccuracies.

4. Become an authorized user

   On a family member's old, low-utilization credit card.

5. Don't close old accounts

   Length of credit history and available credit both matter.

What NOT to Do Before Refinancing

• Don't open new credit accounts - Hard inquiries and new accounts lower scores
• Don't close old credit cards - Hurts utilization and history length
• Don't max out cards - Even if you pay in full, statement balance matters
• Don't miss any payments - Payment history is the #1 factor
• Don't co-sign for others - Adds to your debt obligations

Credit Requirements by Product

HELOC Requirements

• Typical minimum: 660-680
• For best rates: 740+
• Maximum CLTV: 80-90%
• Income verification: Required
• Property types: Primary residence preferred

Home Equity Loan (HELOAN) Requirements

• Typical minimum: 660-680
• For best rates: 740+
• Maximum CLTV: 80-85%
• DTI limit: Typically 43%
• Advantage over HELOC: Fixed rate provides certainty

Cash-Out Refinance Requirements

• Conventional minimum: 620-680 (varies by LTV)
• For best rates: 740+
• Maximum LTV: 80%
• Seasoning: Often 6+ months since purchase
• Higher standards than rate-and-term

Working with a Mortgage Broker

A mortgage broker can help you navigate credit requirements by:

• Comparing lenders: Different lenders have different overlays
• Finding the right product: Matching your profile to best options
• Credit guidance: Advising on quick score improvements
• Alternative programs: Access to non-QM and specialized lenders
• Rate shopping: Finding competitive rates across 200+ lenders

Frequently Asked Questions

Which credit score do lenders use?

Mortgage lenders use a specific version of FICO (typically FICO Score 2, 4, or 5) pulled from all three bureaus. They use the middle score. For joint applications, they use the lower of the two applicants' middle scores.

How long do I need to wait after bankruptcy to refinance?

• Chapter 7 bankruptcy: 4 years (conventional), 2 years (FHA/VA)
• Chapter 13 bankruptcy: 2 years after discharge (conventional), 1 year into payment plan (FHA)

How long after foreclosure can I refinance?

• Conventional: 7 years
• FHA: 3 years
• VA: 2 years

Does refinancing hurt my credit score?

A refinance inquiry may temporarily lower your score 5-10 points. However, multiple mortgage inquiries within 14-45 days (depending on scoring model) count as one inquiry. Long-term impact is minimal if you manage the new loan well.