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What Credit Score Is Needed To Buy A House?

5-minute read

September 17, 2020


*As of July 6, 2020, Quicken Loans is no longer accepting USDA loan applications.

A credit score is an important part of any mortgage application. It’s a three-digit number that evaluates how well you pay off debt. Let’s dive in and look at credit scores, the mark your credit score needs to hit in order to buy a house and which loan types are best for certain credit ranges.

What Score You’ll Need To Buy A House Based On Loan Type

Your credit score is a number that ranges from 300 – 850 and 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 that you have a credit score of about 620 and up 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, a government-backed FHA loan could make sense for you. The minimum credit score for an FHA loan is usually 580.

VA Loan Requirements

A government-backed VA loan can 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® by Quicken Loans® requires you to have a credit score of at least 620 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.  

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.

Getting A Mortgage When You're Ready

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.

Apply with Rocket Mortgage® by Quicken Loans® when you’re ready to get started.

Checking Your Credit Score

It’s easy to check your credit score – you’re entitled to a free credit report from all three major credit reporting agencies once a year. It’s a great idea to check your credit to make sure nothing's amiss with your score.

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

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

Understanding Your Credit Score

Your credit report is an essential part of getting your credit score, as it details your credit history. If this document contains a mistake, it could lower your score.

What Is A Good Credit Score?

Your credit score is calculated from the components of your credit report – the types of accounts you have, credit card and loan payments, account balances and payment history.

Credit scores can range from excellent to poor. Below is an example of the ranges for a VantageScore 3.0 credit score:

  • Excellent:​ 750 – 850

  • Good:​ 700 – 749

  • Fair:​ 650 – 699

  • Poor:​ 550 – 649

  • Bad:​ 350 – 549

FICO® Score vs. Credit Score

The three national credit reporting agencies, Equifax, Experian 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. A majority of 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

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. Quicken Loans® is not a financial advisor, so 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 payment, 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 two 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. When you're ready to buy, Rocket Mortgage® by Quicken Loans® is ready to help you every step of the way!

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