The credit score needed for a mortgage depends on the type of loan. Government-backed loan programs — FHA, VA and USDA — generally have lower credit-score requirements than conventional mortgages. But it’s the lender that ultimately decides what the minimum credit score will be for each loan product.

If your credit score is at or near lenders’ minimum, they could demand a bigger down payment, charge a higher interest rate or require you to pay more fees. In short, you could end up paying more for your home loan. The best way to avoid these penalties is to elevate your credit score before you apply.