Guide
Understanding Credit
Your credit score is one of the biggest factors in your mortgage rate. Here's how it works, what affects it, and how to improve it before you apply.
Credit Score Ranges
Excellent
Best available rates. You're in great shape.
Very Good
Strong rates. Minor improvements can still help.
Good
Competitive rates. Some programs may require higher scores.
Fair
Conventional loans available. FHA may be a better fit.
Poor
FHA loans available with 3.5% down. Work on improvement.
Very Poor
Most programs require a score of at least 580.
What Makes Up Your Score
Payment History
The single biggest factor. Pay every bill on time, every month. Even one 30-day late payment can drop your score significantly.
Credit Utilization
How much of your available credit you're using. Keep balances below 30% of your limit — ideally below 10% — for the best scores.
Length of Credit History
Older accounts help your score. Don't close old credit cards you're not using — the age of those accounts is working in your favor.
Credit Mix
Having a mix of credit types (cards, auto loan, student loan) shows you can manage different kinds of debt responsibly.
New Credit Inquiries
Each hard inquiry (when a lender pulls your credit) can temporarily lower your score by a few points. Multiple mortgage inquiries within 45 days count as one.
How to Improve Your Score Before Applying
- Pay down credit card balances to below 30% of each card's limit.
- Set up autopay so you never miss a payment.
- Don't open new credit accounts in the 6 months before applying.
- Dispute any errors on your credit report at annualcreditreport.com.
- Become an authorized user on a family member's old, well-managed account.
Not Sure Where Your Credit Stands?
Talk to one of our loan officers. We'll review your credit, explain your options, and tell you exactly what it would take to qualify.
Talk to a Loan Officer