Credit score and mortgage?


Hello all,
How does credit score affect your mortgage loan? I am planning to take a home mortgage. But I am doubtful regarding my credit score. What is considered an ideal credit score to get a good mortgage score? I came across this article,, where it is said that credit scores has a direct effect on your ability to get a mortgage. And the credit score has an impact on the interest rates as well. But, If your credit score is low due to past errors, it’s still possible to get a loan. I would like to get more advice on this. How to Improve the chances of getting a Low-Interest-Rate Mortgage? Looking forward to your suggestions on this. Thanks.


First of all credit score has a lot to do with a mortgage along with the amount of debt you owe. Different lenders have different requirements for your credit score but if you are really low I don’t think a mortgage would be possible. 720 and above get the best rates I have heard. The first thing I would do is find out what is your credit score. You can get an estimate at Then do more reading on the home buying process. The more informed you are the better process would be. Read about different programs, closing costs, points etc so you can make an informed choice if you proceed to try to get a mortgage. You might look for a local first time home buying class. I took one before I bought my first house. Know what a lender would lend you before you shop for a house. Work out potential finances before looking for a house.

If you need to improve your credit score look at your credit report and see what are the issues. Collections, write offs, late pays etc. Some of the issues may only improve over time as items fall off of your report. Pay your bills on time. I will repeat that. Pay your bills on time. Only use less than 30% of your total extended credit. The lower that number the better.


@lam is correct that your score should be around 720 or above to get the best rate. You still might be able to get a good rate below that, but the interest cost goes up the lower your score.

If low credit scores are due to errors from the company, you can dispute them. I’d suggest pulling your free credit reports from the government site - (NOT from any of the spammy credit sites). This will give you your full credit history from the three different bureaus - Equifax, Transunion, and Experian. You can then review each of your reports in depth and dispute any errors you find. You don’t want to just check your credit score because that score usually comes from one of the three bureaus - not necessarily the one that your mortgage company will check. You’ll need a few months to clear up errors, so start this process now. Once the reports are accurate, you can monitor your score through Credit Karma, or Discovercards free site.

Lenders will want to see a few things:

  • You have a 20% down payment - without this a loan will require PMI
  • You have some savings outside your down payment
  • You have a good credit score and a solid history of paying back debt on time (car loans, student loans, credit cards)
  • You have a good debt to credit limit ratio - your credit card spending is much lower than your limits
  • You have a reasonable amount of other debt, so it won’t keep you from paying your mortgage. If you have large student loan payments or car payments, that will count against you

Good luck!


@Raymond, your credit score will DEFINITELY impact your mortgage.

  1. Underwriting - does the lender think you are a good risk to give you money? What’s your history of repaying debt? Can you handle the monthly payments that you are trying to take on? So, the parts of your credit report like history of payment and outstanding debt have large impacts on whether they will even give you a mortgage at all.

  2. Interest rates - the higher the credit score, the lower your rates. 720 is the base for good rates, 750 and up is even better.

  3. PMI - I just wrote a long article on PMI. One of the things that affects how much you pay in PMI (if you don’t have 20% down) is your credit score. So a low credit score, the higher the PMI.

If you have lower than 720 credit score, you aren’t completely out of the mortgage game. But it does make it more expensive because interest rates go up. There are things like FHA loans that are available but they have their own issues - like never being able to get rid of their version of PMI. Like @ChiefMomOfficer said, pull your reports and see if you can get any items fixed. At least know what you are working with to see if it is even possible.

Bottom line - high credit score is good. The lower your credit score, the more down payment you’ll want to lower your risk profile for the bank.


Being an experience mortgage professional, I can tell you that credit score is definitely a factor in your interest rate offered by the bank. That being said however, you can get a home loan in a range of 500 - 800 FICO. so don’t be discouraged, just do you best to keep working on your credit. FHA is a great option for lower FICO scores.


Nice topic. i am looking like this type information. Also, I am looking Tampa loan.


Hi Raymond,

You are applying any of the loan, your credit score is the first and most important factor that considers at first.

Here I am quick answering your questions, with useful references, hope it will help you out:

1)- Ideal credit score to get a good mortgage: 580+

2)- Does credit score impacts on the interest rates:

Yes definitely. How much your credit score will be good, more less interest rate you will have while applying for loan

3)- If your credit score is low due to past errors:

For lenders it does not matter why your credit score has got down, so what before applying a mortgage loan, what you can do is, work on credit score improvement. You should read about the different ways to increase your cibil score for any of the loan.

4)- How to Improve the chances of getting a Low-Interest-Rate Mortgage:

Work and understand credit score well so that you can boost it before applying for a loan you required.

Hope all this will help you out. Thanks