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Learn How Your Credit Score Affects Your Mortgage

Your credit score shows lenders how likely you are to make payments on time and manage your finances. In general, the higher your credit score is, the better your mortgage options will be.

Why are credit scores important?

Your credit score, also known as your FICO score – named after the company that created the scoring model – helps lenders understand how you manage your finances and level of risk to the lender. Combined with other healthy financial habits (like having a low debt-to-income [DTI] ratio and a strong financial history), a higher FICO score could mean better loan options and lower interest rates. On the other hand, a lower FICO score could make it harder to qualify for certain loans and result in higher interest rates.

What is a good credit score?

When you apply for a mortgage, we look at your credit score from the three major credit agencies (Equifax, Experian and TransUnion), and use the middle score for your application. If you are applying with another person, we will take the lower, middle score of the two. All FICO scores fall somewhere between 300 (lowest) and 850 (highest). Generally, a score over 700 is considered good, while 620 or lower could make it harder to qualify for certain loans. If your score isn’t the greatest, don’t worry – there are plenty of things you can do to improve it.

Did you know?

Inquiries made in the 30 days leading up to your scoring won’t affect your FICO score.

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Find out what affects mortgage rates

Your credit score, the type of rate you choose and your property's location are some of the factors that make a difference.

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Calculate what you can afford

Estimate a home price to see what you can afford as you shop for a new home.

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Find the mortgage option that’s right for you.  

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