Your credit score is the single most important number in your homebuying journey. It dictates not only whether a lender will approve your mortgage application, but also the specific interest rate you will be offered. Even a slight difference of 0.5% in your interest rate—often the result of a mediocre credit score—can cost you tens of thousands of dollars over a standard 30-year loan.
Mortgage Credit Score Ranges & Interest Rate Chart
Lenders group borrowers into specific "tiers" based on their credit scores. Below is a breakdown of how different credit score ranges typically impact your mortgage rate.
| Credit Score Range | Risk Assessment | Interest Rate Impact |
|---|---|---|
| 740 – 850 | Excellent / Lowest Risk | Best available market rates |
| 720 – 739 | Very Good | +0.125% to +0.25% higher |
| 700 – 719 | Good | +0.375% to +0.50% higher |
| 680 – 699 | Fair / Good | +0.625% to +0.75% higher |
| 620 – 679 | Below Average | +1.00% to +1.50% higher |
Common Credit Score Questions
What does an 805 or 802 credit score get me?
If you have an 802, 805, or anything above 740, congratulations! You are in the "Excellent" tier. This means you will qualify for the lowest possible mortgage rates offered by any lender. There is virtually no difference in mortgage rates between a 750 score and an 805 score—both are considered top-tier and receive the best pricing.
What rate can I get with a 700 credit score?
A 700 credit score is considered "Good." You will easily qualify for a conventional loan, but your interest rate will typically be about 0.375% to 0.50% higher than someone with a 740+ score. On a $300,000 mortgage, this could mean paying an extra $100 per month. If you are close to 720, it is highly recommended to try and boost your score before applying to save money.
How many points does a mortgage inquiry raise or lower your credit score?
Applying for a mortgage will lower your score slightly, not raise it. A single "hard inquiry" from a mortgage lender typically drops your score by 2 to 5 points. However, credit bureaus group all mortgage inquiries made within a 14 to 45-day window as a single inquiry, so you can shop around with multiple lenders without severely damaging your score.
How to Prepare
Before you even begin looking at houses or talking to a lender, you need to know exactly what is on your credit report. Many buyers unknowingly have errors on their profiles, such as outdated late payments or accounts that do not belong to them, which can drag their scores down.
Do not use third-party websites that charge you for your score. The only official website authorized by the U.S. Federal Government to provide your free annual credit reports is AnnualCreditReport.com.