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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. Does Quicken loans allow to use one persons income and the other persons credit as well as their income on a mortgage or do both applicants have to have the minimum credit requirements in order to use the income of the other applicant?

    1. Hi Salinna:

      Both applicants have to meet minimum credit requirements in order to use their income on the loan. This is a standard guideline from all the major mortgage investors including Fannie Mae, Freddie Mac, FHA and VA. That said, you can certainly look into your options online with Rocket Mortgage® or give one of our Home Loan Experts a call at (888) 980-6716. Good luck!

    1. Thanks for letting us know, Hopper! Should you decide to move forward, you can get started online with Rocket Mortgage or give us a call at (888) 980-6716. We hope to hear from you soon! Have a great day!

  2. Hello,
    My credit score is fair, we’ve had some problems with our credit cards but we are currently paying those off and we are almost done. Right now quicken loans says they cant help us. What about the fact of looking at our long mortgage payment history and see that NOT ONCE have we defaulted on our mortgage payments. We are current on our mortgage payments and always pay on time. If we currently pay our mortgage on time and we have done so for the past 30+ years doesn’t mean we won’t continue doing it. thank you

    1. Hi Eldini:

      I certainly understand your frustration and will pass this along to our client relations team to look into your situation. What I can tell you is that we follow the standards of various mortgage investors including Fannie Mae, Freddie Mac, FHA, VA, etc. The qualifications necessary to get a loan will vary depending on the mortgage investor and the exact details of the loan you’re trying to get. I’m going to have someone reach out to take another look and see if we can help you. Thanks for reaching out!

  3. Hi I have a credit score of 577 and am working on 2 accounts to get them current this in return should increase my score to 600. Is there mortgages for fair credit. I am wanting 75thousand. thanks Jodi

    1. Hi Jodi:

      There are mortgages for fair credit. We may be able to help you depending on your other qualification factors starting at a median FICO score of 580. You’re close enough that we should be able to work with you to come up with a plan to get your credit score where it needs to be now and in the future. I’m going to recommend you speak with one of our Home Loan Experts at (888) 980-6716 and we can go from there. Have a wonderful day!

    1. Hi Cynthia:

      I’m going to have someone reach out because I see you’ve been working with us. I can tell you that if you have bad credit, you’ll have to get it up before you can apply for a mortgage with most lenders. The ones that will give you a loan may do so with unfavorable terms. However, I’m going to have someone reach out to see if we can help give you some steps to get you where you need to be.

  4. Hello,

    I’m looking to buy a home my credit score is 650 I want to qualify for the first time home buyer program. My monthly income is $4500? How much can I qualify for and what are my chances of qualify for the first time home buyer please?

    1. Hi Pierre:

      I can’t talk about your personal approval chances on the blog because every situation is different and we would need more information. With that being said, your credit score would enable you to look at both conventional and FHA loans. If you want to look into your options, you can do so online through Rocket Mortgage. One of our Home Loan Experts could also walk you through this at (888) 980-6716.

      While Quicken Loans doesn’t personally provide first-time home buyer grants, we do accept them as down payment funding from other sources. HUD has a good list of available grants by state. Hope this helps!

    1. Hi Sarah:

      I can tell you we use a try merged credit report from all three bureaus: Experian, Equifax and TransUnion. The model being used depends on the credit bureau and actually could change. So we don’t disclose which one we use because it could change at any moment. We never want to give you the wrong information. I see that you are working with us. I’m going to have someone reach out about this.

  5. I have a small mortgage $50,000 and want to buy a house my husband and I are scores are high but he has a short sale a year ago. Will we be able to get approved?

    1. Hi Anita:

      In your case, I’m going to suggest you speak with one of our Home Loan Experts. There may be options to use your husband’s income if you choose to do that depending on the circumstances surrounding the short sale and the type of loan you’re trying to apply for. You could also apply for a loan on your own, but you just need to be aware that the existing mortgage will be counted in your debt-to-income (DTI) ratio if you don’t sell the property. You can get in touch with us at (888) 980-6716.


  6. Hi,
    I have a 641 credit score, a garnishment and have only been at my new job for 2 months (income is about 2,500 mo after tax). Do I qualify for a home loan of $120k?
    Thank you,

    1. Hi Alisha:

      There are a variety of factors that go into whether you qualify and whether we can use your income from a new job including whether the job is in the same field, how close it is to your previous income, etc. I’m going to recommend you speak with one of our Home Loan Experts at (888) 980-6716.


  7. we currently have a 1st and small 2nd Mortgage; we want to refinance the 2nd mortgage (not happy with the current lender). Do you provide that type of lending?

    1. Hi Les:

      We don’t offer second mortgages, but we could help you combine your first and second mortgage into one primary. That could help you get a better rate. If you would like to go over your options, you can do so online through Rocket Mortgage or by giving one of our Home Loan Experts a call at (888) 980-6716. Hope this helps!

  8. Did l use an incorrect document? I thought that l would be considered on the basis of other measures. Did l walk into another application that does not apply. Please clarify.

    Thanks. Richard K. Fields

    1. Hi Richard:

      I see you’re working with us. I’m going to get this over to our client relations team to help you look into any options you have.

      Kevin Graham

  9. I currently live in Texas and want to move to Georgia before 2018 is over. Can I get preapproved for a home loan(primary residence) for a house in Georgia while I am still working and living in Texas. My credit score is above 650 but below 700 and I dont have that much debt. With a moderate household income .

    1. Hi CP:

      You can be approved for a primary residence in Georgia while living in Texas. The key here is that you have to occupy your new primary residence in Georgia within 60 days of closing on the home. In your situation, I recommend speaking with one of our Home Loan Experts at (888) 980-6716. Hope this helps!

      Kevin Graham

  10. What about chances on getting a loan if you have a high credit score, Low to moderate income and no debt ?

    1. Hi Angelica:

      I’m not licensed, so I can’t give you anything official on whether you would be approved or not, but I can speak generally and give you resources to help you look into your options more thoroughly. A high credit score is a good thing for your approval chances. So is having no debt. Low-to-moderate income is also not a deal breaker, but you might be preapproved for a lower loan amount which impacts the type of houses you’re able to look at. If you want to check out your options online, you can apply and get a preapproval or complete refinance approval through Rocket Mortgage. Otherwise, one of our Home Loan Experts will be happy to work with you at (888) 980-6716. Hope this helps!

      Kevin Graham

    1. Hi Nancy:

      Quicken Loans doesn’t offer any subprime mortgages. In terms of not having to deal with seasoning, if you have a Chapter 13 bankruptcy dismissed or discharged, you can apply immediately through the FHA or VA. Otherwise, there’s a waiting period of at least a year before we can help you with any of our products. I’m going to recommend you speak with one of our Home Loan Experts by filling out this form or calling (888) 980-6716. Even if we can’t help you right now, we can give you a good idea of where you stand and the actions you might have in the future.

      Kevin Graham

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