A 600 credit score sits in an awkward band. It’s high enough that FHA lenders will approve you without much argument, and low enough that most conventional lenders won’t touch you at all. Which side of that line you’re on decides everything about your strategy — the program, the paperwork, the rate, and whether refinancing now is even the right call.
What a 600 Credit Score Actually Unlocks
The short answer: government-backed loans, mostly. Plus a handful of portfolio lenders who keep their own money at risk and can bend rules the big banks can’t.
FHA Is the Realistic Path
FHA’s floor is 580 for the standard 3.5% down program and 500 for a 10% down version. At 600 you’re comfortably inside the 3.5% bucket. You’ll pay a 1.75% upfront mortgage insurance premium, usually rolled into the loan, plus an annual premium of 0.55% of the outstanding balance. On a $240,000 loan that annual premium runs about $110 a month — real money, and often the reason an FHA refinance doesn’t pencil out once you’re past 80% loan-to-value.
Conventional Is Usually Closed Off
Fannie Mae and Freddie Mac require a 620 minimum, and the pricing grids get genuinely ugly between 620 and 639. A 600 score doesn’t get you a conventional loan at a bad rate. It gets you no conventional loan through standard channels. Anyone quoting a 600 borrower a sub-6% conventional rate is either misreading the file or hoping you won’t read the Loan Estimate closely.
VA and USDA
VA doesn’t publish a score minimum at all, though most VA lenders overlay 620 on top of it. A smaller group goes to 600 or below for borrowers with strong compensating factors. USDA typically wants 640 for automated approval, but manual underwriting can work at 600 with documented on-time rent and utility history.
The Price Tag of a 600 Score
Risk-based pricing bakes your score into the rate before a human ever looks at your file. On a $240,000, 30-year fixed loan, the spread between a 600 borrower and a 740 borrower usually lands somewhere between 0.75% and 1.00%.
- 600 score: roughly 7.25%–7.75%
- 660 score: roughly 6.75%–7.00%
- 740+ score: roughly 6.25%–6.50%
At 7.50%, principal and interest on that loan is $1,678 a month. At 6.75%, it’s $1,557. That’s $121 a month, $1,450 a year, $7,300 across five years — same house, same loan amount, same stack of paperwork.
Which Lenders Actually Say Yes
Channel matters more than brand name here. National banks generally set hard 620 floors in their own credit policy, so no amount of explaining your situation will move them. Credit unions and community banks portfolio their loans, which means they write their own rules. Some will do 600, occasionally 580, especially if you’ve banked with them for years and they can see your deposit history.
Non-QM lenders will go down to 550 or lower, but those rates run 1.5% to 3% above prime with heavier fees attached. Mortgage brokers are worth one phone call because they can price FHA and portfolio options side by side. Rate sheets vary far more than most borrowers expect — the same loan really does cost more at one bank than another, and at a 600 score that gap is amplified.
The 60-Day Moves That Reprice Your Loan
You don’t need a 720. Getting from 600 to 640 is the meaningful jump because it opens conventional lending entirely. Two or three behaviours usually get you there.
Utilization Is the Fastest Lever
Credit card balances above 30% of the limit hurt disproportionately. Drop a $3,000 balance on a $5,000 card to $1,500 and you’ll often see 15 to 25 points after one billing cycle, once the issuer reports the new figure. Below 10% is better still.
Hunt Down the Errors
Pull all three bureau reports and read them line by line. Collections paid off two years ago that were never updated, duplicate medical bills, a car loan still reporting as open after payoff — these are common and disputable. A rapid rescore, which your lender can order, can reflect a correction in three to five business days instead of thirty.
Leave the Old Cards Open
Closing a paid-off card raises your utilization ratio and shortens your average account age at the same time. Both push your score the wrong way. Keep it open with one small recurring charge and set it to autopay. For a fuller sequencing of what to fix first, this guide on how to refinance a home loan with a low credit score without overpaying for it walks through the order of operations.
Run the Break-Even Before You Sign Anything
A refinance is a bet that you’ll stay in the house long enough for the monthly savings to outrun the closing costs. The arithmetic is simple: total cost divided by the monthly difference.
$4,800 in closing costs against a $121 monthly saving breaks even at roughly 40 months. Sell or refinance again in year two and you’ve lost money on the deal. That’s also why headline claims about a lower rate deserve scrutiny — the real benefit depends on your balance, your remaining term, and how deep into the loan you already are. The actual math behind a 1 percent lower rate is worth running yourself before a loan officer runs it for you.
Where the Costs Hide
Lender fees are only part of the picture. Title insurance, settlement services, the appraisal at $500 to $800, recording fees, and prepaid interest all land on the Loan Estimate. On a $240,000 refinance, expect total closing costs in the $4,500 to $7,200 range depending on state and loan size.
Rolling those costs into the loan keeps cash in your pocket but raises the balance and the payment, which can quietly erase the savings you were chasing in the first place. Sometimes a slightly higher rate paired with a lender credit is the better trade, and how low-closing-cost refinance rates really work explains when that trade flips in your favour.
Cash-Out and Debt Consolidation at 600
Cash-out is harder at 600. FHA allows up to 80% loan-to-value; portfolio lenders often cap you at 70% to 75%. If the goal is killing 22% credit card interest, the arbitrage looks obvious on paper — replacing $15,000 of revolving debt at 22% with mortgage debt at 7.5% saves around $180 a month in interest. But you’ve moved unsecured debt onto your house, and the repayment term stretches from three years to thirty. Running those figures through a refinance debt consolidation calculator will tell you whether the real saving justifies the collateral.
When Six Months of Waiting Beats Refinancing Today
If your score is 600 and climbing — you just paid off a collection, your utilization dropped, an old late payment is about to age past the two-year mark — waiting one or two reporting cycles can outperform any negotiation. Going from 600 to 640 might drop your rate half a point and open conventional options entirely. On $240,000 that’s roughly $75 a month, and it costs you nothing but patience.
Waiting clearly wins in two situations: you’re within 40 points of 620, or a charge-off is scheduled to fall off your report within the year. It clearly loses in two others: you’re on an adjustable rate about to reset upward, or you’re carrying credit card balances at 25% where the interest compounds faster than your score improves.
Five Questions to Ask Before You Hand Over an Application
- What’s your minimum score for this program, and is that an overlay on top of the agency rule?
- Can you show me pricing at 600 and at 620 side by side, same loan amount, same day?
- What’s the all-in closing cost including title, appraisal and prepaids — not just lender fees?
- Does this loan carry a prepayment penalty or a seasoning requirement before I can refinance again?
- Will you run my file through automated underwriting before I pay for an appraisal?
Ask those five in the first ten minutes of the call. A lender who answers with specific numbers is worth the application fee. One who deflects into “let’s get you pre-approved first, then we’ll talk pricing” is showing you exactly how the rest of the process will go.