Most Texas buyers focus on home prices and neighborhood. But before any of that matters, lenders look at one number first: your credit score. That single number shapes what rate you get, what loan programs you qualify for, and how much you'll pay every month for the next 15 to 30 years.
What Credit Score Do You Need to Buy a Home in Texas?
Minimum score requirements vary by loan type. Conventional loans — backed by Fannie Mae and Freddie Mac — typically require a score of at least 620. FHA loans (backed by HUD) generally allow scores as low as 580 with a 3.5% down payment, or as low as 500 with 10% down, though individual lenders may set higher thresholds. VA loans for eligible veterans and active-duty service members often have no official minimum score, but most lenders look for approximately 620 or higher.
In the DFW market, where median home prices have remained elevated, qualifying for the best conventional rate often requires a score of 740 or above. Getting pre-approved early lets you understand exactly where you stand — and how much room you have to improve.
How Lenders Tier Rates by Score
Mortgage lenders use risk-based pricing. The lower your score, the higher the risk they assign, and the higher the rate they charge to compensate. This is not a single jump — it happens in tiers, roughly every 20 to 40 points.
As an illustrative example: a buyer with a 759 score might receive a rate approximately 0.5% to 0.75% lower than a buyer with a 699 score on the same loan amount. On a $350,000 home in Texas, that difference can translate to roughly $100 to $150 more per month — and $30,000 to $50,000 more in total interest over a 30-year loan. These figures are illustrative and not guaranteed; actual rates depend on lender, loan type, down payment, and market conditions at the time of application.
Lenders also use your score to determine whether you'll owe private mortgage insurance (PMI) and at what rate. A stronger score can reduce or eliminate PMI costs on conventional loans.
The Three Credit Bureaus and Your Mortgage Score
Your lender will pull your credit from all three major bureaus — Equifax, Experian, and TransUnion — and use the middle score. If you're buying with a co-borrower (spouse, partner, etc.), lenders typically use the lower of the two middle scores to qualify the loan.
This matters because scores can vary by bureau depending on which accounts each one has on file. Before applying, it's worth reviewing your reports from all three at AnnualCreditReport.com to catch any errors or discrepancies that could be dragging a score down unnecessarily.
What Can Move Your Score Before Closing
You do not always need to wait years to improve your score. Several actions can produce measurable results within 30 to 90 days:
- Pay down revolving balances. Credit utilization — how much of your available credit you're using — is one of the most impactful factors. Getting balances below 30% of your credit limit, and ideally below 10%, can meaningfully raise your score.
- Do not open new accounts. New credit inquiries and new accounts lower your average account age and can temporarily reduce your score. Hold off on new credit cards, car loans, or other financing until after closing.
- Dispute reporting errors. Incorrect late payments, duplicate accounts, or accounts that don't belong to you can suppress your score. The Consumer Financial Protection Bureau (CFPB) provides guidance on how to dispute errors with each bureau.
- Avoid closing old accounts. Older accounts contribute positively to credit history length. Closing them can shrink your available credit and raise your utilization ratio.
A qualified mortgage lender can run a rapid rescore — a process where corrected information is submitted directly to the bureaus and updated within days — if you have legitimate errors to fix before your application.
Texas-Specific Programs That Have Their Own Score Rules
Texas buyers have access to several assistance programs through the Texas Department of Housing and Community Affairs (TDHCA), including down payment assistance and mortgage credit certificates. These programs often have their own minimum score requirements — typically 620 to 640 — and income limits. VA loans for eligible Texas veterans may offer more flexibility on score thresholds.
Each program layers differently with your primary loan type, so comparing options with your lender before choosing a path is essential.
When to Pull Your Credit (and When Not To)
Timing matters. Multiple mortgage lenders pulling your credit within a short window — typically 14 to 45 days depending on the scoring model — usually count as a single inquiry for scoring purposes. So shopping rates with several lenders in a focused period will not hurt your score the way multiple unrelated hard pulls might.
What you should avoid is letting lenders pull your credit speculatively before you're serious about applying. Be intentional: know your target score tier, make any improvements you can, then authorize pulls when you're ready to compare real offers.
Your credit score is one of the most controllable variables in the homebuying process. A few deliberate steps before you apply can shift you into a better rate tier, lower your monthly payment, and reduce what you pay over the life of the loan — making a real difference on a Texas home purchase at today's prices. Talk to a licensed buyer agent at EXL Group (TREC #9015220) to get connected with lenders who will give you an honest picture of your options.