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Credit can be a vexing topic for even the most financially savvy consumers. Most people understand that good credit history can improve your chances of qualifying for a loan because it shows the lender you’re likely to repay it.

However, understanding the meaning of your score, how it’s calculated, how it can influence your mortgage eligibility – and the interest rates you pay – is not as easy as it sounds. Below, we break down all of these topics.

Explaining Your Credit Score

The FICO credit score (created by the Fair Isaac Corporation) is one of the most common scores used by lenders to determine your credit worthiness. It’s a component of pricing for the interest rates and fees you’ll pay to get your mortgage.

While exact scoring models may vary by lender, some variation of the standard FICO score is often used as a base. FICO takes different variables on your credit report, such as those listed below, from the three major credit bureaus (Equifax, Experian and TransUnion) to compile your score. Those range from 300 – 850. From this information, they compile a score based on the following factors:

  • Payment history (35%)
  • Amount owed (30%)
  • Length of credit history (15%)
  • Types of credit (10%)
  • New credit (10%)

Payment History

Roughly 35% of your credit score is based on your history of timely payments on your debt. If you’ve made your payments on time and in full in the past, there’s a good chance you’ll do the same in the future, so your credit score may be higher. If you’ve had tax liens, late payments, lawsuits or bankruptcies, they can result in a lower credit score.

Amount Owed

Roughly 30% of your score is based on the amount of money you owe. Higher balances tend to lower your credit score, while lower balances can positively impact it.

Length of Credit History

About 15% of your score is calculated on the length of your credit history. Typically, the longer you’ve had open credit accounts, the higher your score can be.

Lacking credit history may not hurt you when it comes to FHA and VA loans, but good credit history is essential when applying for a conventional loan.

Types of Credit

Types of credit determine about 10% of your credit score. This refers to the variety of types on your report, including revolving debt like credit cards and retailer cards as well as installment debt like student loans, auto loans or mortgages. Having a mix of installment and revolving debt can help prove you can handle different types of payments.

New Credit

About 10% of your score is determined by new lines of credit. Opening multiple lines of new credit too quickly can negatively impact your credit score, as it may look like you’re desperate for credit. Asking for multiple lines of credit and receiving multiple credit inquiries also has the potential to hurt your score, even if you don’t end up opening new accounts.

Note that there are two types of credit inquiries – one for lending purposes and one for educational reasons. Inquiries for lending purposes may ding your credit score by a few points. However, getting your credit pulled by a company like Rocket HQ, which shows you your report and score for educational purposes, won’t impact your score.

If you’re shopping around for the best rate or loan terms, don’t worry. Multiple credit inquiries over a short period of time for the same type of loan will be grouped together as one inquiry, so your score won’t be as heavily influenced.

What is the Average Credit Score in the U.S.?

So how does your credit score stack up against others? The average credit score in the United States was 699 in April 2016, according to Experian’s seventh annual State of Credit report. This is a record-high for Americans.

What Credit Score is Needed to Buy a House?

You may be wondering what credit score you need to buy a house. Unfortunately, you may not find an exact answer. There are several factors that go into qualifying for a mortgage besides your credit score. This includes the type of loan you’re applying for as well as your income and debt levels. Because of this, there isn’t an exact number you need to qualify. Some guidelines, however, are listed below:

  • Conventional Mortgage: 620
  • FHA Mortgage: 580
  • Veteran Affairs (VA) Mortgage: While the VA does not have a minimum credit score requirement, Quicken Loans requires a 620 credit score on all VA loans

It’s not only the minimums that matter. A higher credit score will generally qualify you for a lower rate on your mortgage, saving you money.

Conventional Mortgages

Conventional mortgages are home loans that follow the standards set by Fannie Mae and Freddie Mac. They’re uninsured by the government and known for lower down payments and good interest rates. These are typically best for those with good or excellent credit, as these loans require a higher credit score than an FHA loan.

These loans tend to offer the most competitive interest rates and flexible repayment periods, such as 15- and 30-year mortgage terms. While you may pay more money up front, you can save more money over the course of a conventional loan than you would with an FHA loan.

Minimum Credit Score for Conventional Loans

At Quicken Loans, your credit score for a conventional loan must be 620 or higher. Various lenders have different requirements and may require a different score.

FHA Loans

Backed by the Federal Housing Administration, FHA loans are insured by the government, making them easier to qualify for than conventional loans. They offer down payments as low as 3.5% and low-equity refinances, which allow you to refinance up to 97.75% of your home’s value.

FHA loans can benefit borrowers with lower credit scores or those who spend a significant portion of their income on housing. Current homeowners who are underwater on their mortgage – and could lower their monthly payment by refinancing – may also benefit from an FHA loan.

Minimum Credit Score for FHA Loans

The minimum FICO score for an FHA loan through Quicken Loans is 580, with a 3.5% minimum down payment. Other lenders may have different requirements.

For a standard FHA loan, a minimum of one credit score is required to qualify. If your lender obtains all three of your credit scores, they’ll use the middle score for consideration. If you apply for a mortgage with your spouse, lenders will use the lower of the two middle credit scores.

Better Credit Scores Lead to Greater Odds of Getting Approved

It’s important to know your credit score and understand what impacts it before you begin the mortgage process. Once you understand this information, you can begin to positively impact your credit score or maintain it so you can give yourself the best chance of qualifying for a mortgage.

It is possible to qualify for a mortgage with a relatively lower credit score but with high income and low levels of debt. It’s also possible to be turned down for a mortgage if your score is relatively higher, but you have high levels of debt and a lower income. Credit score requirements should be used as a guideline, as debt levels, income and down payments will also be taken into consideration when determining your mortgage eligibility.

Are you ready to start the mortgage process? Contact a Home Loan Expert to get started!

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This Post Has 171 Comments

  1. Hi,
    My husband and I are looking to buy our first house, nothing expensive, just something to suit our needs. I’m a ghost in the credit world, and I’m concerned that this will hurt my chances at getting a loan. I’m not 100% on my husbands credit score. The last time I saw it I know it was low, but we are having things disputed through a paid service. Is there any help for people in our situation?

    1. Hi Ashley:

      I’m going to suggest you start by building up credit. You can do that by using some of the tips in this blog post. You can’t use your income if you don’t have credit and are not on the loan in most cases.

      I’m going to recommend that you and your husband check out Rocket HQ. You can pull your credit report for free and check out personalized tips on how to improve.


  2. Hello,
    I am currently researching loan options, me and my wife recently bought a house about a year ago, but due to a promotion we live to far away for her to continue driving to work (2 hours) especially with a baby on the way. We recently found a house we like and are trying to get a FHA loan while our house is still on the market. Both our scores (635, 670 mid scores) are good enough for the loan but cant seem to find a lender willing to work with us. Our debt to income ratio is around 42% until our current house sells or is rented, and I believe there is an account in collections until it is removed from a won dispute (about a month ago, 2 of the 3 credit boroughs update transunions hard to crack). was just wondering if this is something that can be worked with?

    1. Hi Steven:

      That DTI is on the higher side, but we can definitely help you look into your options and see if we can give you any advice at the very least. We do have credit experts that might be able to give you advice regarding TransUnion. I’m going to suggest that a good first step might be to talk to one of our Home Loan Experts about your situation. You can do that by filling out this form or calling (888) 728-4702.

      Kevin Graham

  3. Hello, I would like information on being able to get a loan. My credit score is currently at 524 and I have two collections for unpaid cable bills that I’m going to be paying off in about a month. I would like to know if I pay them off will it make my credit score go up, and will I be able to qualify for a loan to buy a house.

    Thank you,

    Tammy C.

    1. Hi Tammy:

      I can tell you that we require a 580 credit score before we can help you with any kind of loan. Paying off your collection should help with that score. I’m also going to recommend you check out our friends at Rocket HQ. You get a monthly credit score and report for free, but you also can get personalized tips on how to improve your score. That would be a good place for you to get started.

      Kevin Graham

  4. my rent is high trying to get into a lower payment so I can pay my credit on time .found a house 29000 and trying fha w my low credit score in the 500s.is fha the way to go so I can get ontrack w a much lower living expense so my other creditors r paid on time .please comment back to me ,,bill

    1. Hi William:

      With your credit score, if you’re looking to get into a home as quickly as possible, FHA would certainly be the way to go. I should note that they do require a 580 credit score. We do have a service in Rocket HQ where you can get your credit report and score for free each month without affecting the score. They’ll also give you personalized tips on what you can do to improve.

  5. Does Rocket Mortgage use the FICO 8 score when approving for a home . If so what is the min credit score? is it a combined average or the middle score ?

    1. Hi Eric:

      Unfortunately, we don’t disclose the Fico scoring models we use because these models are constantly being updated and could change. I can tell you that the minimum credit score for an FHA loan is 580 and 620 on conventional and VA. The VA doesn’t specify a specific minimum credit score, so that policy may vary depending on the lender. We also use a tri-merged credit report model. That means we pull from each of the three credit bureaus and take the middle score.

      Kevin Graham

  6. I had perfect credit until my husband got sick, he was the bread winner! Now our credit is poor:-( ! I’ve owed my home since 1998! Paid $66k now it’s worth over $200k. Never late on my house payments! It’s credit card and dr bills that messed up our credit. Would I be wasting my time trying to get a better interest rate, we are at 8% now . That was great in 98! Would I just be wasting my time looking for a bank to refinance my home?
    Thank you for your time

    1. Hi Marinda:

      I would definitely take a look at trying to get a better interest rate if you’re at 8%. Whether we can help you depends on a variety of things including your credit. The good news is credit is something that can be worked on. I’m going to suggest you talk to one of our licensed mortgage bankers who would be able to reach out with tips. You can fill out this form or call 888-728-4702. In the meantime, check out this article with tips on improving your credit.

      Kevin Graham

  7. I had a 630 credit score and with four inquiries it brought my score to a 564. This is a vantage 3.0 system that was used from my credit card tracking system. I am wanting to buy a home. How likely would I be to get a loan? I do have good credit card payment history but do have around 2500.00 to pay off all cards. Also, I am married so does it go by both of our scores? He only has one credit card and only owes around 300.00. I have a car loan which I have never been late either and only owe 244.00 so once that is paid off will it help my score?

    1. Hi Brenda:

      Most mortgage lenders including us use the FICO credit scoring model. I’m not sure how it compares to VantageScore. If you’re married and he is on the loan, both of your scores would definitely be taken into account. I’m going to suggest that your next step would be to talk to one of our Home Loan Experts by filling out this form or calling 888-728-4702. They can more thoroughly into your situation. Hope this helps!

      Kevin Graham

  8. Hi, I just checked my credit score & I have a score of 617. Is that a good enough score for a first time home buyer

    1. Hi Nicole:

      That’s a good enough score to qualify for an FHA loan. If you push it just a few points higher, you can qualify for a conventional loan starting at 620. If you’d like to get started, you can get an online preapproval through Rocket Mortgage. Have a great day!

      Kevin Graham

    1. Hi Juan:

      It’s probably best if I have you talk to a mortgage banker. If you explain what you’re trying to do and why they can go over your options and next steps. If you could go ahead and fill this out, a mortgage banker licensed in your state will be happy to contact you.

      Kevin Graham

  9. Hello, wanted to know if I have a credit score for refinancing a house, and a different credit score to lease a truck. Was told there are two different scores?

    1. Good morning, Rik:

      There are two different scoring models in use now. Most lenders use FICO, but VantageScore is starting to gain popularity. There are also three different credit bureaus: Experian, Equifax and Trans Union. That could be what they’re referring to as well.

      Hope this helps!

      Kevin Graham

  10. Hello
    I would like to know some more info for me to try to qualify for first time home buyers . Could someone get in touch with me about that? Thanks


    1. Rita depending on where you live, you can (city, state) if you google you will find many institutions that offer this free course, its very informative, and will also help you to get your mortgage credit certificate for tax purpose;s and its also for first time home buyer’s if your
      a first time home buyer, and its the best way to find out all about getting a mortgage
      when my wife and i went to the course the instructors wanted me to teach the class on credit
      because i know so much information, because i am obsessed with my credit

    1. Hi Michael:

      I don’t know the answer to that question, but I’m going to get this to someone who will know what version we use. As to the FICO portion of the question, I’m going to assume the scores are the same as the ones they list on their website, but I can’t say for sure because that’s a question for them.

      Kevin Graham

      1. I have a subscription for myfico credit monitoring for my wife and I. I have 28 different scores among the 3 agencies.
        I have 9 different fico scores with Equifax.
        I have 9 with Transunion
        and 10 with Experian.

        For instance My experian fico “2” score is 635. It states that fico 2 is most widely used in mortgage leanding. On the other hand myfico 8 score is 568. Also, there is now a new released myfico 9 edition. myfico 9 as 3 versions with each of the three reporting agencies. 1. Fico 9 general version. 2. Fico 9 auto lending version. 3. Fico 9 bank card version. My general score here is 594. MyFico 8 is the overall most used version.

        It’s like this with all 3 reporting agencies. So, very confusing. My problem is this. I’ve been working on restoring credit for a long time and I don’t know where i stand to be able to buy a home. Should I wait a while longer before I apply? Because yall do a hard pull on my credit there is 3-5 point hit on my profile just to see if I qualify.

        Figuring this out shouldn’t be this esoteric! I don’t know what to do. Please help.


        1. Hi Mike:

          I realize this is incredibly confusing, especially since MyFICO gives you access to all your scores and you don’t know the difference and it gets messy. I don’t know about FICO 2 being the most widely used. Given that and where your score is at, I might wait just a little while longer. You have to be at 580 before you can qualify for FHA. That said, you’re close enough at this point that I’m going to have someone reach out. We may be able to give you some tips specific to your situation that will help put you over the top and get your score to the point you can get a mortgage.

          Kevin Graham

        2. mike january 2015 my credit scores were 590-600 these score were through credit karma, now i know they are not fico scores, they are the vantage 3,o scores that some lenders still use, you can monitor your credit reports (trans union and equifax) to see the 5 important parts of your credit report. fast forward, after working on my credit and getting everything in line and improving my scores, in July of 2015 i applied for a mortgage, i was going off my credit karma scores, i closed on my house in nov of 2015
          although my score was not super good, i was still able to get loan. currently @4.750
          for 275.000 mortgage. now 9 months later my fico score 8 is 702 and i am thinking of refinancing to get a lower rate credit karma provides free credit scores, also check out all the other free credit sites that do not require a credit card ever

  11. My husband called a few weeks ago and was told he had nothing on his report to go off of. he has since then has gotten a secured credit card. How long should he wait till he calles back to check again?

    1. Hi Angela:

      I’m going to have someone reach out to give you more definitive advice based on your personal financial profile. What I can tell you is that in general, you have to be making payments on a few different things, whether those are credit cards or other loans, before you can really get a mortgage approval. That said, I’m going to have someone contact you and look into this. In the meantime, this blog post has some great tips on building credit.

      Kevin Graham

    1. Hi Mel:

      I’m not sure of the answer to that question, but I’m going to get this to one of our Home Loan Experts who should be able to give you some more detailed information.

  12. As of today my scores are EX 670, Trans 669 and EQ 613. I have two debts on my credit report $3,000 each. Can I still qualify for an FHA loan without bringing those debt balances current?

    1. Hi Tamee:

      Everyone’s situation is different, but we’d be happy to help you look into your options and see what we can do. Someone will be reaching out.

      Kevin Graham

  13. Hello,

    I have almost $200,000 in student loan debt. I’m a teacher making 50,000 a year but I also have business income that is around $18,000 yearly. Will I be able to still qualify for a mortgage under these circumstances? My credit score is 586.



    1. Hi Shannon:

      Every situation is different. I’m going to have someone reach out and help you look into your options.

      Kevin Graham

  14. I recently (August) got a home equity line of credit. I want to refinance nd have one payment how long should I wait to do that? My credit score right now is between a 603 and 613. I have a Rural Development loan.

    1. Hi Nicole:

      We don’t do Rural Development loans or home equity lines of credit, so it’s probably best to ask specific questions of your lender. However, I can tell you that there’s probably a minimum amount of time you have to wait before you can refinance these loans. This period is referred to as seasoning. Hope this gives some insight.

      Kevin Graham

  15. We are trying to get a loan for the house we r currently in to buy….but my fiance credit is a 540 do to medical bills he got in December 2014 – January 2015 due to heart surgery. Would you be able to help us, we live in missouri and have been approved thru the JHAP Program

    1. Hi Kendra:

      I’m not completely familiar with the structure of that particular program so I can’t say for certain whether we can help you. I’m going to pass you along to a Home Loan Expert to help answer that question. I can tell you the credit score needs to be higher. For example, you need a score of 580 to get an FHA loan. We do have a program for clients to help build up their credit and we can give you more information on that. Here’s a blog post with credit tips as well.

      Kevin Graham

    1. Hi Cara:

      That depends on the type of loan you’re getting. I’m going to pass your question on to a Home Loan Expert who can reach out to you for more information and talk about the best loan for your situation. Thanks!

      Kevin Graham

  16. Hello I sold my house in 2012 as a shortsale…since then I have rebuilt my credit some..my score 655…..I bought a car my credit score dropped over 70 pts…..my old car lender isn’t showing up after I paid on time for almost 5 yrs…..when my new car lender paid them off it disappeared maybe that is y it dropped ….my fico is 607 ….my old home loan is still showing but paid should I wait 4 more years to apply for another home loan I’m in a better financial situation

    1. Hi Deanna:

      That depends on your situation. I’m going to have a Home Loan Expert reach out tomorrow so we can help you look into your situation.

      Kevin Graham

    1. Hi Frances-

      there are a number of things you can do to rebuild your credit. While we can’t comment on your specific situation without knowing more details, this blog post should get your started down the right path.

      Kevin Graham

  17. I just spoke to one of your reps yesterday about a refi, but he told me that it would not get approved as my wife’s credit score is 617. Your article says you can go with FHA down to 580. So, who is correct, you or the rep I spoke with yesterday?

    1. Donald:

      You can qualify for an FHA loan down to 580, but certain options are only available if you get a conventional loan and other factors may come into play as well. I’m going to have one of our Home Loan Experts reach out to you to take a look at your specific situation again.

      Kevin Graham

  18. All I have on my credit reports r delinquent medical bills. I can’t even find some of the co. That hold my debts. Will this always affect my credit and how can I fix this??

    1. Hi Judy-

      You may be able to tell who holds your debts by looking at your credit report. If it’s not on there, you can try calling the medical provider to see if your debt has been transferred and who holds it. The good news is medical debt are weighed less heavily that other forms of debts. It also comes off your report when your insurance pays it, no matter how old it is. You can find more information here. Hope this helps!


  19. Could you please tell me where I can find the forms I need to despute a couple of things that are on my credit?

  20. Great breakdown of what a FICO score consists of. It is important to know what the score consists of so that we know how to improve it. Thanks for sharing!

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