Your options for refinancing with a credit score below 620 — FHA, VA, and other programs that still approve you.
Which Refinance Programs Are You Eligible For?
Enter your credit score and loan type to see available options.
Estimated rate range for your score—
Est. monthly payment at mid-range rate—
Potential savings vs. 7.5% baseline—
2024 Refinance Rate Estimates by Credit Score
Credit Score Range
Loan Type
Est. Rate Range
Avg Monthly Pmt*
760–850
Conventional
6.25%–6.75%
$1,847–$1,946
720–759
Conventional
6.50%–7.00%
$1,896–$1,996
680–719
Conventional
6.75%–7.25%
$1,946–$2,048
640–679
Conventional / FHA
7.25%–7.75%
$2,048–$2,152
600–639
FHA only
7.75%–8.50%
$2,152–$2,306
580–599
FHA Streamline
8.50%–9.25%
$2,306–$2,462
Below 580
Very limited
9.25%+ or ineligible
$2,462+
*Estimated monthly payment on $300,000 loan. Rates are illustrative estimates for 2024 market conditions and vary by lender, LTV, and other factors.
How to Refinance a Mortgage with Bad Credit — Programs That Actually Work
A credit score below 640 doesn't automatically lock you out of refinancing — it just narrows your options and raises your rate. The key is knowing which programs are designed specifically for lower-score borrowers and whether you qualify based on your current loan type.
FHA Streamline Refinance (Minimum Score: 580)
If you already have an FHA loan, the FHA Streamline Refinance is the most accessible option for borrowers with damaged credit. It requires no new appraisal and minimal income documentation — the primary requirement is that you've made your last 6 mortgage payments on time with no 30-day lates in the past year. The rate won't be as good as a conventional refinance, but for borrowers with scores in the 580–640 range, it's often the best available path.
VA IRRRL — Best Option for Veterans
The VA Interest Rate Reduction Refinance Loan (IRRRL) has no minimum credit score set by the VA, though individual lenders typically require 580–620. Like the FHA Streamline, it requires no new appraisal and streamlined underwriting. If you have a VA loan and have served, this is almost always your best refinance option regardless of credit score. The funding fee is only 0.5%, far below standard VA loan fees.
Conventional Refinance with a Low Score
For conventional loan holders with scores below 660, options are limited but not zero. Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow refinances down to 620, though you'll face loan-level price adjustments (LLPAs) that significantly raise your effective rate. Check our guide to lowering your mortgage rate to understand exactly how your score affects your pricing before applying.
The Credit Score Improvement Strategy
If you're at 610 and conventional refinance rates are unworkable, a 3–6 month credit repair window can pay off substantially. The most effective levers: pay revolving balances below 30% of limit (each card, not just in aggregate), dispute any errors on all three bureau reports, and avoid new credit applications. Going from 610 to 660 can reduce your rate by 0.5%–0.75%, worth thousands over the loan's life. Use the break-even calculator to see whether waiting 90 days to improve your score pays off versus locking now.
Bad Credit Refinance FAQ
What is the minimum credit score to refinance a mortgage?
The minimum credit score to refinance depends on the loan type. For conventional refinances, most lenders require a minimum of 620, though rates improve significantly above 680. FHA loans can be refinanced with scores as low as 580 through the FHA Streamline program. VA loans through the IRRRL program have no official minimum score, though lenders typically require 580–620. USDA streamline refinances require a minimum score of 640. Scores below 580 face very limited options, primarily non-QM or hard-money lenders at much higher rates.
Can I refinance my mortgage if my credit score is 580?
Yes — if you have an FHA loan, the FHA Streamline Refinance is available at 580. If you have a VA loan, the VA IRRRL is available at 580 with most lenders. For conventional loans, options at 580 are nearly nonexistent at reasonable rates. The practical path for a 580 conventional borrower is typically to use the 6–12 months before refinancing to push the score above 620, at which point conventional options open up and rates become more manageable. See the score-to-rate table above to see what rates you can realistically expect.
How do mortgage lenders evaluate bad credit borrowers differently?
Beyond the raw credit score, lenders evaluate the reason for the bad credit. A single medical collection from 2021 is viewed very differently from a pattern of late payments or a recent foreclosure. Lenders look at the recency and severity of negative items — a late payment from 5 years ago matters far less than one from 6 months ago. Compensating factors like significant home equity (below 60% LTV), stable employment of 2+ years, and substantial cash reserves can offset marginal credit in manual underwriting. FHA and VA loan officers have more flexibility in this regard than automated conventional underwriting.
Does applying for a refinance hurt my credit score?
Yes, but minimally. Each mortgage application generates a hard inquiry, which typically drops your score by 2–5 points temporarily. However, FICO treats multiple mortgage inquiries within a 14-day window as a single inquiry — so applying to 5 lenders in the same two-week window is treated the same as applying to one. Given how much rates vary by lender, shopping multiple lenders always makes financial sense. Check our refinance closing costs guide to understand the full cost picture before applying.