Can I Refinance with a 580 Credit Score? Options & Alternatives

If you’re sitting at a 580 credit score and hoping to refinance, you’re not alone. Many homeowners find themselves with imperfect credit due to life events — medical bills, job changes, unexpected expenses — and worry that refinancing is out of reach.

Here’s the good news:

You can refinance with a credit score of 580.

But the loan options, requirements, and costs will vary depending on the type of refinance you’re seeking.

This guide breaks down what refinancing looks like with a 580 score, which programs allow it, how lenders evaluate your application, how much it may cost, and what alternatives exist if you’re just below qualifying thresholds.

Key Takeaways

• Yes, you can refinance with a 580 credit score, but options are often limited

• FHA and VA programs offer the most flexibility for borrowers with low credit scores

• Conventional refinances typically require a 620+ score, so 580 may not qualify

• Cash-out refinances at 580 are difficult but possible with FHA in some cases

• Higher rates or fees are common with lower credit scores

• Credit score requirements, rates, and fees vary by lender, market conditions, loan structure, and borrower profile.

💡 Pro Tip: Because lender pricing can vary widely even for borrowers with the same credit score, it’s important to get multiple offers and compare them side by side.

Can You Refinance with a 580 Credit Score?

Short answer:

Yes — but you may have limited options.

A 580 credit score is below the minimum for conventional refinances, but you may still qualify for:

• FHA Rate-and-Term Refinance

• FHA Streamline Refinance

• Some VA Refinances (depending on lender overlays)

A cash-out refinance is much harder, but it may still be possible with an FHA loan.

Refinance Options at a 580 Credit Score

Let’s break down which refinance options are available to you.

FHA Refinance

Minimum Credit Score: 580

FHA is the most accessible refinance program for low-credit borrowers, including the following loans.

FHA Rate-and-Term Refinance

Allows you to:

• Lower your interest rate

• Reduce monthly payments

• Change your loan type or term

FHA Streamline Refinance

This is the easiest refinance path if you already have an FHA loan.

Benefits:

• No appraisal

• No income documentation

• No credit score requirement from FHA (but lenders often require 580)

• Fastest approval process

This is often the best option for a 580 borrower, but actual requirements may vary by lender.

VA Refinance (If You’re Eligible)

VA loans do not have an official minimum credit score. But lenders usually require a minimum score of 580–620.

If you qualify for VA benefits, you may have access to the following loan types.

VA IRRRL (Streamline Refinance)

• No appraisal in most cases

• Minimal documentation

• Credit score requirements vary — some lenders accept 580

Cash-Out Refinancing at a 580 Score

A cash-out refinance at 580 may be possible — but challenging.

FHA Cash-Out Refinance

• Many lenders require a credit score of 620–640

• A few allow credit scores as low as 600

• Very few allow scores of 580 or less, and requirements are often significantly stricter

Even if you find a lender offering an FHA cash-out loan at a 580 credit score:

• Rates will likely be higher

• Underwriting will likely be strict

• You’ll need a stable income and a low debt-to-income ratio

• You’ll need at least 20% equity after the cash-out

VA Cash-Out Refinance

• Some lenders allow cash-out at 580–600 scores

• Most lenders prefer a 620+ score or higher

• Lender requirements and pricing will vary by lender. Numbers listed here are for illustrative purposes only. Always check with your lender to see what they require.

💡 Pro Tip: Pricing can vary significantly for the same loan and borrower. Even with a 580 credit score, you may still have options. Make sure you shop around to get the most competitive deal.

How a 580 Credit Score Affects Your Refinance Rate

Lower credit scores often lead to higher pricing adjustments.

Here’s what you can expect:

FHA Rates with 580 Score

• 0.25%–0.50% higher than someone with 680+

• More expensive mortgage insurance

• Possible lender-required points

VA Rates with 580 Score

• Slightly higher rates

• Possible funding fee depending on service history

• Less strict underwriting than conventional

Conventional Rates

• Not available at 580

• All figures are illustrative. Consult with a mortgage professional to get actual numbers based on your qualifications.

How Lenders Evaluate a 580 Credit Score

At 580, lenders will look closely at:

1. Debt-to-Income Ratio (DTI)

They may require:

• DTI under 45%

• Strong income documentation

2. Payment History

Recent late payments are a major hurdle, but an FHA Streamline may be more forgiving, especially if you find a lender that doesn’t pull credit for an FHA Streamline loan.

3. Loan-to-Value (LTV)

Lower LTV (more equity) = better approval odds.

4. Reserves

Some lenders require you to show:

• 1–2 months of mortgage reserves (money set aside to cover a couple months of mortgage payments)

• More for cash-out or multi-unit properties

5. Recent Credit Behavior

Avoid:

• New credit cards

• New loans

• High utilization

💡 Pro Tip: A lower credit score doesn’t mean you can’t get good pricing or that you should pay markups. Before signing, upload your Loan Estimate to Fincast to ensure you have a competitive offer.

Benefits of Refinancing at 580

Even with a low score, refinancing may help you:

1. Lower Your Payment

If rates have dropped since your original loan, you may save money on your monthly payment.

2. Switch from a High-Rate Loan

If your credit score has improved since you obtained your original loan, you may save money monthly and over the loan’s term.

3. Move from ARM to Fixed

If you have an adjustable-rate loan that may adjust soon, refinancing into a fixed-rate loan may help provide long-term stability.

4. Eliminate High-Interest Debt

If you have equity in your house and can pay it off with a cash-out refinance, you may significantly improve your monthly cash flow — but only consider it if the math works.

• Individual results and benefits can vary significantly by borrower.

💡 Pro Tip: A bad refinance offer can erase any gains you’ve made on your credit score. Before you accept an offer, verify that your pricing aligns with your credit scores.

Drawbacks of Refinancing at 580

You should be aware of the challenges:

1. Higher Rates

Low scores often mean higher interest rates.

2. Higher Upfront Fees

Lenders may charge:

• Points

• Higher origination

• Higher APR

3. Tougher Underwriting

Lenders may require more documentation and conditions.

4. Limited Cash-Out Options

Most lenders restrict cash-out for borrowers with a 580 credit score.

Alternatives If You Can’t Refinance at 580

If you find your options too limited or expensive, consider these options.

1. Improve Your Score to 600–620

This small improvement opens up opportunities with more lenders — and potentially lowers costs.

2. Pay Down Revolving Debt

This can increase your score very quickly.

3. FHA Streamline

If you already have an FHA loan, even with mid-500s credit scores, some lenders approve streamline refinances.

4. Add a Co-Borrower With Higher Credit

If you have someone close to you with a higher credit score who can be a co-borrower, it can boost your approval odds and potentially lower your pricing.

• Co-borrowers assume a large risk by taking on the liability. Use caution when choosing this option.

5. Wait 2–3 Months and Rebuild

On-time payments and lower credit utilization often produce meaningful score improvement, which may lead to better pricing.

Why Comparing Lenders Is Essential at a 580 Credit Score

Two lenders could analyze the same score and produce wildly different offers. This is exactly where Fincast gives homeowners a significant advantage.

For example:

• One lender may charge 1.5 points

• Another may charge 0

• One may deny the loan

• Another may approve easily

• Some will allow cash-out

• Others won’t touch the file

This variability is why Fincast is so valuable for low-credit borrowers.

How Fincast Helps You Find a Competitive Refinance Option at a 580 Credit Score

With a 580 score, lenders often overcharge — simply due to perceived risks.

Fincast helps you see what lenders are charging and which loans may be a better fit.

How Fincast Works

1. Upload your Loan Estimate

After you apply with any lender, you’ll receive a Loan Estimate  within three business days. You can use this to negotiate with other lenders or upload it to Fincast and, within minutes, see what other options may be available. No extra credit pull. No new application.

2. Fincast analyzes:

• Rate

• APR

• Fees

• Points

• Credits

• Mortgage insurance

• Closing costs

3. Vetted lenders anonymously compete to beat your pricing

Fincast doesn’t share your personal information; you remain anonymous which means you aren’t subject to:

• Spam

• Sales pressure

• Phone calls

4. You get a transparent comparison

If your lender is fair, Fincast confirms it. If not, you see your potential savings instantly.

• Not all borrowers with a 580 credit score will get approved to refinance.

FAQs: Refinancing With a 580 Credit Score

Can I refinance a conventional loan with a credit score of 580?

No, you typically need at least a 620 credit score to refinance a conventional loan..

Is FHA the best option for a 580 credit score?

It can be because the FHA provides the most flexibility, but it still depends on lender overlays.

Can I do an FHA Streamline refinance with a credit score of 580?

It may be possible, since the FHA doesn’t require a minimum credit score for the streamline program, but requirements vary by lender.

Can I cash-out refinance at a 580 credit score?

Maybe, but it’s often difficult, and requirements vary by lender.

Does refinancing hurt my credit?

Only temporarily because lenders pull your credit to qualify you for the loan. The new loan may also cause a small dip, but with regular on-time payments, it should increase again shortly.

Bottom Line

A 580 credit score does not eliminate your ability to refinance. FHA and VA refinances remain accessible, especially through streamlined versions. Rates and costs may be higher, but refinancing can still provide meaningful financial benefits — especially if you secure a fair offer.

Since lenders price 580-credit loans very differently, comparing offers is essential to avoid overpaying.

Action Checklist

☑️ Check your credit score

☑️ Identify your eligible refinance programs

☑️ Request your Loan Estimate

☑️ Upload your Loan Estimate to Fincast

☑️ Compare qualified lenders anonymously

☑️ Choose the refinance that maximizes your savings — even at 580

👉 Ready to find the best refinance options available with a 580 credit score?

Upload your Loan Estimate to Fincast and let vetted lenders compete anonymously to offer you their best pricing — no spam, no extra credit pulls, just savings.

• This article is for educational purposes only and does not constitute financial advice. Consult with a licensed mortgage professional for your specific situation.