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What Credit Score Do You Need To Buy A House?

Victoria Araj5-minute read

October 21, 2021


Credit score is an important consideration when you’re buying a house, because it shows lenders your ability to pay off debt. 

Let’s dive in and look at the credit score you’ll need to buy a house, which loan types are best for certain credit ranges and how to boost your credit.

Credit Score Needed To Buy A House (By Loan Type)

Your credit score is a number that ranges from 300 – 850 and that is used to indicate your creditworthiness. Several factors are evaluated to determine your credit score, and conventional and government-backed loans have different credit score requirements.

Conventional Loan Requirements

It’s recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, you might be offered a higher interest rate.

FHA Loan Requirements

If you have a lower credit score or don’t have much cash socked away for a down payment, you might consider an FHA loan, which is insured by the Federal Housing Administration. The minimum credit score for an FHA loan is usually 580.

VA Loan Requirements

A government-backed VA loan might be an option for you if you’re a veteran or qualified service member or spouse. There’s no industry-set minimum credit score, but Rocket Mortgage® requires a credit score of at least 580 for a VA loan.

USDA Loan Requirements

You could look into a government-backed USDA loan if you plan to live in a qualified rural or suburban area and have an income that falls below 115% of the area median income. A minimum credit score of 640 is ideal for a USDA loan, though some lenders require a minimum of 620.  

We don't offer USDA loans at this time.

Once you have a basic understanding of what credit score is needed for each type of loan, it’s time to take your own score into consideration.

Understanding Your Credit Score

Your credit report is an essential part of getting your credit score, as it details your credit history. Any mistake on this document could lower your score. It’s easy to check your credit score, and you’re entitled to a free credit report from all three major credit reporting agencies once a year. 

It’s good practice to stay on top of your credit score and check it often for any errors to ensure you’re in the best possible position. From there, you can assess your options for a conventional or government-backed loan – and, when you’re ready, apply for a mortgage.

FICO® Score Vs. Credit Score

The three national credit reporting agencies – Equifax®, ExperianTM and TransUnion® – collect information from lenders, banks and other companies and compile that information to formulate your credit score.

There are lots of ways to calculate credit score, but the most sophisticated, well-known scoring models are the FICO® Score and VantageScore® models. Many lenders look at your FICO® Score, developed by the Fair Isaac Corporation. VantageScore® 3.0 uses a scoring range that matches the FICO® model.

The following factors are taken into consideration to build your score:

  • Whether you make payments on time
  • How you use your credit
  • Length of your credit history
  • Your new credit accounts
  • Types of credit you use

How To Increase Your Credit Score Before Buying A House

If you want to qualify for a loan and your credit score isn’t up to par, you can take actionable steps to increase your credit score. Rocket Mortgage® is not a financial advisor, so it’s best to consult a professional for help repairing your credit.

Tip #1: Pay Off Outstanding Debt

One of the best ways to increase your credit score is to determine any outstanding debt you owe and pay on it until it’s paid in full. This is helpful for a couple of reasons. First, if your overall debt responsibilities go down, then you have room to take more on, which makes you less risky in your lender’s eyes.

Lenders also look at something called a credit utilization ratio. It’s the amount of spending power you use on your credit cards. The less you rely on your card, the better. To get your credit utilization, simply divide how much you owe on your card by how much spending power you have.

For example, if you typically charge $2,000 per month on your credit card and divide that by your total credit limit of $10,000, your credit utilization ratio is 20%.

Tip #2: Pay Bills On Time

A large part of what a lender wants to see when they evaluate your credit is how reliably you can pay your bills. This includes all bills, not just auto loans or mortgages – utility bills and cell phone bills matter, too.

Tip #3: Don’t Apply For Too Much Credit

Resist any urge to apply for more credit cards as you try to build your credit because this puts a hard inquiry on your credit report. Too many hard inquiries negatively affect your credit score.

Other Considerations When Buying A House

Credit score is just one element that goes into a lender’s approval of your mortgage. Here are some other things lenders look at.

1. Debt-To-Income Ratio

Debt-to-income ratio, or DTI, is the percentage of your gross monthly income that goes toward paying off debt. Again, having less debt makes you less risky to the lender, and you’re able to take more on through a mortgage.

To find your DTI, divide the amount of recurring debt (rent, car payments, etc.) you have by your monthly income. Here’s an example: 

If your debt is $1,000 per month and your monthly income is $3,000, your DTI is $1,000/$3,000 = 0.33, or 33%.

It’s to your advantage to aim for a DTI of 50% or lower; the lower your DTI, the better chance you have at being offered a lower interest rate.

2. Loan-To-Value Ratio

The loan-to-value ratio, or LTV, is used by lenders to assess risk in lending to you. It’s the loan amount divided by the house purchase price.

For example, let’s say a mortgage loan is worth $120,000 and you buy a home for $150,000. Your LTV would be 80%. As you pay off more of your loan, your LTV decreases. A higher LTV is riskier for your lender because it means your loan covers a majority of the home’s cost.

LTV decreases when your down payment increases. Going off the example we just used, if you get a mortgage of $110,000 instead because you put down $40,000 ($10,000 more than before), your LTV is now 0.73, or 73%.

Different lenders accept different LTV ranges, but it’s best if your ratio is 80% or less. If your LTV is greater than 80%, you may be required to pay a form of private mortgage insurance. This varies by loan type.

3. Income And Assets

Your lender wants to be sure that you maintain steady employment. Lenders often ask for 2 years of proof of income and assets. The steadiness of your income could affect the interest rate you’re offered.


The credit score required to buy a home differs based on your loan option. 

If you’d like information on your credit score, Rocket Homes®, a sister company to Rocket Mortgage®, can help. Rocket Homes® helps you track and understand your credit profile.

You can view your TransUnion® credit report, which is conveniently updated every 7 days to ensure you get the most up-to-date information, as well as your VantageScore® 3.0 credit score.

Still have questions? Contact a Home Loan Expert.

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Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.