Credit Score Minimums by Loan Type in Wisconsin

FHA Loans — Most Accessible

FHA loans are the most credit-flexible government-backed mortgage. Minimum 580 credit score qualifies for 3.5% down payment. Scores between 500–579 require 10% down. FHA loans also have more flexible debt-to-income ratio requirements than conventional. The trade-off: FHA requires mortgage insurance premium (MIP) for the life of the loan if you put less than 10% down — unlike conventional PMI which can be removed once you reach 20% equity.

Conventional Loans — More Rate-Sensitive

Conventional loans (Fannie Mae/Freddie Mac) require a minimum 620 credit score for most programs. However, the rate pricing is tiered — every 20-point band in credit score affects the interest rate. A 620 score may technically qualify but will produce a rate meaningfully higher than a 700+ score. Conventional loans allow PMI removal at 80% loan-to-value, unlike FHA's lifetime MIP structure.

USDA Rural Development — 640 Required

USDA Section 502 Guaranteed loans require a minimum 640 credit score for streamlined automated underwriting approval. Scores below 640 may be considered through manual underwriting with compensating factors (strong income, reserves, low debt ratios) — but it is more difficult and not guaranteed. For Juneau County buyers targeting USDA zero-down financing, 640 is the practical minimum to target. See our full USDA guide.

WHEDA Programs — 620–640 Depending on Program

WHEDA Advantage Conventional requires 620. WHEDA Advantage FHA requires 640. WHEDA's down payment assistance programs require the credit score of the underlying first mortgage program. A buyer planning to use WHEDA Easy Close DPA with an FHA first mortgage needs 640+. See our WHEDA guide for the full program breakdown.

How Credit Score Affects Your Interest Rate

The Rate Tier System

Mortgage interest rates are priced in tiers based on credit score bands. At current market rates, the spread between a 620 score and a 760+ score on a conventional $235,000 loan can be 0.5–1.0 percentage points in interest rate. That difference on a 30-year loan translates to approximately $70–$140 more per month — or $25,000–$50,000 over the life of the loan. The credit improvement ROI for first-time buyers is one of the highest-return preparations available.

What 40 Points Can Do

A buyer at 620 who improves to 660 moves from the lowest conventional tier to a meaningfully better pricing tier. A buyer at 638 who improves to 640 unlocks USDA zero-down financing. A buyer at 640 who improves to 680 often shaves 0.25–0.375% off their interest rate. Each of these is a specific, achievable improvement with a clear financial return.

How to Improve Your Credit Score Before Applying

The Three Highest-Leverage Moves

1. Pay down revolving credit card balances. Credit utilization (balance vs. limit) is the second-largest scoring factor. Getting revolving utilization below 30% — ideally below 10% — can move a score by 20–40 points within 1–2 billing cycles. This is the fastest-acting lever available. 2. Do not open new credit accounts. New accounts create hard inquiries and reduce average account age — both negative factors. Avoid new credit cards, car loans, or any credit application for 6–12 months before your mortgage application. 3. Check your credit report for errors. Request your free reports from all three bureaus at annualcreditreport.com and dispute any inaccurate negative items. Errors on credit reports are more common than most consumers expect.

What Does NOT Work Quickly

Closing old accounts (hurts utilization ratio and account age). Paying off collections without a pay-for-delete agreement (the collection stays on the report, the score may not improve). Taking out a credit repair loan without a clear strategy. Time is the only cure for late payments in the past 2 years — the impact fades but does not disappear quickly.

Frequently Asked Questions