What Credit Score Do You Need for a Cash-Out Refinance?

What Credit Score Do You Need for a Cash-Out Refinance?

Here is the short answer: a conventional cash-out refinance needs a 620 credit score. In practice, many lenders prefer 640 to 680 or higher, and the market skews well above the minimum. The median cash-out borrower scored about 741 between 2013 and 2023, according to CFPB data.

A cash-out refinance replaces your mortgage with a bigger one and hands you the difference in cash, so lenders treat it as slightly riskier than a rate-and-term refinance. That is why the score bar and the equity bar both sit a little higher.

The best rates go to scores of 700 and up when you also keep at least 20 percent equity. Government-backed loans reach lower: FHA cash-out allows 580, and VA cash-out often accepts 550.

Cash-Out Refinance Requirements by Loan Type

Here is how the three main programs compare.

Loan Type	Minimum Score	Max Cash-Out LTV	What to expect
Conventional	620	Keep about 20% equity	Minimum 620, but many lenders want 640 to 680+. 700+ gets the best rates.
FHA	580	Up to 85%	Allowed at 580; some lenders set their own floor at 620.
VA	550	Up to 90%	Often accepts 550, the highest cash-out LTV of the three.

The median cash-out borrower scored about 741, a reminder that while 620 opens the door, stronger scores dominate this market. Across programs, lenders generally want your debt-to-income ratio under 43 to 50 percent.

What Lenders Really Score

Your credit score is not one mysterious number. It is built from five factors, and the two biggest are the two you can move fastest. Payment history at 35 percent and amounts owed at 30 percent together make up about two thirds of a FICO score, and amounts owed is mostly your credit card utilization, which you can lower in a single billing cycle.

One thing that surprises cash-out borrowers: a mortgage lender pulls all three of your bureau scores and uses the middle one, not the highest and not an average. So the number that matters is your second best. Cleaning up payment history and card balances lifts all three at once.

Beyond the Score

Even a strong score does not close a cash-out refinance by itself. Lenders also weigh:

1. Home equity. How much you keep after the cash-out. Conventional lenders want you to leave about 20 percent in the home.
2. Loan-to-value ratio. Your new loan balance divided by the home’s value. FHA allows up to 85 percent, VA up to 90 percent.
3. Debt-to-income ratio. Your monthly debts against your monthly income, generally wanted under 43 to 50 percent.
4. Cash reserves. Months of payments you could cover if income stopped. Reserves reassure the lender.
5. Income and proof of it. Pay stubs, tax returns, or bank statements showing you can carry the larger payment.

The equity you keep is the cash-out version of a down payment. More of it lowers the lender’s risk and can offset a weaker score.

Download Credit Booster AI on iOS and Android before you apply. It reads all three of your credit reports, flags the errors that drag your score down, and shows which paydown lifts your score the most, so you cash out in the best tier you can reach.

How to Improve Your Score Before You Apply

You do not need a perfect score. You need to cross into the next tier, because the rate curve moves in steps.

1. Lower your card utilization. Getting balances under 30 percent of their limits, and ideally under 10 percent, is the quickest win. Amounts owed is about 30 percent of your score.
2. Fix report errors. One in five reports carries a mistake. Removing a wrong late payment or a paid collection can move your score fast.
3. Keep paying on time. Payment history is 35 percent of the score, so a clean recent stretch matters.
4. Start early. A realistic 90-day improvement is 30 to 60 points, often enough to jump a tier. Because a cash-out refinance is rarely urgent, begin your prep 6 to 12 months out and let on-time payments and lower balances compound.

The Bottom Line

A cash-out refinance is available across a wide credit range. Conventional starts at 620, FHA at 580, and VA at around 550. But the median borrower scores about 741, so the real competition for the best rate is high, and your score sets both the rate and how much cash you can pull.

Before you apply, spend a few months pulling down card balances and clearing errors. A 30 to 60 point move can drop your rate a full tier and let you keep more of your cash. Download Credit Booster AI on iOS and Android to see your reports, catch what is holding your score back, and fix it before you lock.

Related reading: Check the credit bar for a home equity loan, a second mortgage, and a construction loan. For the big picture, see what credit score you need for a mortgage.

Sources

• AmeriSave, Credit Score Requirements for Cash-Out Refinancing: amerisave.com
• Freedom Mortgage, Cash-Out Refinance Credit Score: freedommortgage.com
• The Mortgage Reports, Cash-Out Refinance Guide: themortgagereports.com
• FICO, What Makes Up Your Credit Score (myFICO): myfico.com

Frequently Asked Questions

What credit score do you need for a cash-out refinance?

A conventional cash-out refinance needs a 620 minimum, though many lenders prefer 640 to 680 or higher. FHA cash-out refinances allow 580 (some lenders set 620), and VA cash-out refinances often accept 550. The best rates go to scores of 700 and up. In practice the market skews high: the median cash-out borrower scored about 741.

What is the median credit score for cash-out borrowers?

About 741, based on CFPB data covering 2013 to 2023. That is well above the 620 conventional minimum, which shows that while the door opens at 620, stronger scores dominate this market. It also means a mid-600s borrower is competing against much higher-scored applicants for the best pricing.

Can I get a cash-out refinance with a 580 credit score?

Yes, through an FHA cash-out refinance, which allows 580 and up to 85 percent loan-to-value. A VA cash-out refinance can go even lower, often accepting 550, with up to 90 percent LTV for eligible veterans. Conventional cash-out needs a 620. Expect a higher rate at these scores, so paying down cards first helps.

How much equity do I need for a cash-out refinance?

On a conventional cash-out refinance, plan to keep at least 20 percent equity after taking cash out. FHA cash-out allows up to 85 percent loan-to-value, and VA cash-out can reach up to 90 percent. The more equity you keep, the lower your risk to the lender and the better your rate.

What credit score gets the best cash-out refinance rate?

Scores of 700 and above earn the best pricing, especially when you keep at least 20 percent equity in the home. Between 620 and 700 you can still qualify, but you pay a higher rate. Lowering card balances and clearing report errors before you apply is the fastest way to reach the better tier.