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How Your Credit Score Impacts Mortgage Rates

Your credit score plays a big role in your mortgage rate. The higher your score, the lower your rate — and the more money you stand to save.

By Aly J. Yale

Written by

Aly J. Yale


Aly J. Yale is a personal finance journalist with work featured in Forbes, Fox Business, The Motley Fool, Bankrate, The Balance, and more.

Edited by Reina Marszalek

Written by

Reina Marszalek

Senior editor

Reina is a senior mortgage editor at Credible and Fox Money.

Updated April 5, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”


Your credit score and credit history play a big role in your ability to get a mortgage. Mortgage lenders use your credit report to gauge your risk as a borrower — and the lower your score and spottier your history, the riskier you are to most lenders.

To safeguard from this risk, lenders charge a higher interest rate the lower your score, all other things being equal. In fact, with a credit score of 699, you could pay nearly 0.4% more for your mortgage rate and over $15,000 more in interest on a $200,000 mortgage over your loan term than someone with a 760 score, according to one calculator.

Why your credit score impacts your mortgage rate

Your credit score reflects your past credit usage, which lenders use to measure how responsible you are with credit. It speaks to your past payment and debt management habits, and it gives lenders an idea of what they can expect if they loan you money to buy a home.

As such, credit scores directly influence what mortgage rate a lender offers you. Higher credit scores will usually mean a lower interest rate (and a lower monthly payment), while lower scores will usually receive higher rates.

Learn More: Comparing Credit Score Ranges

What’s a good credit score to buy a house?

It’s not just your interest rate that’s impacted by your credit score, but the long-term costs of your loan, too. 

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There’s a pretty big discrepancy in both rates and total interest paid.

If you compare a top-tier credit score to a score in the 620 to 639 range, it could mean a difference of over $63,000 over the life of the loan.

Find Out: 800 Credit Score Mortgage Rate: What Kind of Rates Can You Get?

How to get a mortgage with a low credit score

If you have a low credit score and are looking to buy a home, your best bet is to boost your score before applying for a home loan. You can also talk to a housing counselor about your situation. They’ll be able to walk you through your options — as well as any down payment or closing cost assistance programs you might be eligible for.

You might also consider an FHA loan, which offers less stringent credit requirements than other loans. In some cases, borrowers with credit scores as low as 500 might be able to qualify for an FHA loan (as long as they have at least a 10% down payment).

Keep Reading: Can You Buy a House with Bad Credit?

How to improve your credit score before buying a house

Improving your credit score is the best way to increase your chances of qualifying for a mortgage loan, as well as getting a lower interest rate.

To do this, you should:

  • Pay your bills on time: Late payments can hurt your score significantly.
  • Settle any late bills or accounts in collections: These can hurt your score considerably, too.
  • Check your credit report for errors: These should be reported to the credit bureau ASAP, as correcting them can improve your score.
  • Pay down your balances: Higher balances equal lower credit scores. Using a high percentage of your available credit lines can also hurt your score, so try to lower your overall credit utilization as well.
  • Keep your accounts open: Having a long credit history can actually help improve your score, so even if you pay off a balance in full, keep the account open if you can.

Once you’re getting ready to buy a home, you should also take steps to protect your credit. Avoid any big purchases, don’t apply for any new credit cards or loans, and make sure to shop around for your loan within the same short period. This will keep those credit inquiries from hurting your score — and your chances of getting a loan.

Learn More: How to Build Credit Fast

Start shopping around

No matter what your credit score is, shopping around for your mortgage is critical. Interest rates, loan products, terms, and more all vary by lender, and if you want the best deal on your loan, you’ll need to consider at least a few different lenders in your search.

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Checking rates won’t affect your credit score

Find Out: How Much It Costs to Buy a Home

Meet the expert:
Aly J. Yale

Aly J. Yale is a personal finance journalist with work featured in Forbes, Fox Business, The Motley Fool, Bankrate, The Balance, and more.