What Credit Score Do You Need to Refinance a House?

Refinancing your mortgage can help you secure a lower interest rate, adjust your loan term, or tap into home equity. Your credit score plays a significant role in determining whether you qualify and what rate you receive.

Lenders typically require at least a 620 credit score to refinance a conventional loan, but higher scores lead to better loan terms. If your score isn't where it needs to be, there are ways to improve it before applying. Understanding how your credit score affects the refinancing process can help you determine if you need to take action to improve your odds of approval.

What is refinancing, and how does it work?

Most homeowners take out a mortgage loan when they purchase a home. Your lender assigned you an interest rate based on your application, financial standing, and other factors. When you refinance a house, you replace your existing home loan with a new one that has a new rate and terms. People often refinance to secure a lower interest rate, reduce their monthly payments, or change their loan terms. Some homeowners also use cash-out refinancing to leverage home equity to cover large expenses.

The refinancing process works similarly to applying for a mortgage:

• Compare lenders to find a good fit.
• Apply with your chosen lender. You must meet the lender's credit and income requirements to qualify.
• Provide specific personal and financial information and any necessary documentation required by the lender.
• Once approved, the lender pays off your old loan and issues a new mortgage loan with the agreed-upon rate and terms.

Why is your credit score important when refinancing?

Your credit score is one of the most important factors lenders consider when determining your eligibility and interest rate. It's a reflection of your financial health and shows lenders how likely you are to repay a loan. A higher score makes it easier to qualify for lower rates, while a lower score can lead to higher borrowing costs or even a loan denial.

“As of February 19, 2025, a borrower with a 760+ FICO score can qualify for a 7.11% interest rate according to myFICO,” says Andrew Latham, certified financial planner and content director for SuperMoney.com. “However, someone with a 620-639 score may get a 7.78% rate. That difference might seem minor, but on a $330,000 mortgage — the average mortgage balance — it adds up to over $54,000 in extra interest over 30 years. The higher your credit score, the less you pay — it's that simple.”

What credit score do you need to refinance?

Most lenders require a minimum 620 FICO credit score to refinance a house, though specific requirements vary by lender and loan type.

“Most lenders require a minimum 620 FICO score for refinancing, but that only gives you access to the loan — it doesn't guarantee favorable terms,” Latham says. “To truly optimize your savings, aim for a 760+ FICO score, which gives you a shot at the lowest rates if your income, debt, and down payment are in good shape.”

How to improve your credit score before refinancing

If your credit score isn't where you want it to be, there are steps you can take to improve your score before refinancing:

• Lower your credit utilization: Pay down credit card balances to keep your utilization below 30%. Ideally, aim for under 10% to maximize your score increase.
• Check your credit reports: Review your reports for errors that could be hurting your score. If you find incorrect late payments or accounts that don't belong to you, dispute them with the credit bureau.
• Make on-time payments: Payment history is the most significant factor in your credit score. Avoid missed or late payments before applying for a mortgage refinance.
• Avoid new credit inquiries: Hard inquiries from new credit applications can temporarily lower your score. Hold off on opening new credit cards or loans before refinancing.
• Consider a lender that accepts lower scores: Some lenders specialize in bad-credit refinancing, offering alternative approval criteria or government-backed loan options.

Can you refinance with bad credit?

Refinancing with bad credit is possible, but it often means higher interest rates, stricter loan terms, and additional fees. Many lenders require a 620 credit score or higher, limiting your options if your score falls below that threshold. FHA and VA refinance loans may allow lower scores.

If your score is below 620, you might need to work on improving your credit first. Some lenders offer manual underwriting or alternative approval methods, but qualifying with bad credit is more challenging.