How Your Credit Score Affects Your Mortgage Rate

Credit scores are a major aspect considered by lenders when you apply for a home mortgage. Credit scores are also an important factor that can help you to obtain pre-qualification for a mortgage. When you are seeking to understand how your credit score will affect your mortgage rate, you should consult with a professional. Lucey Mortgage Corporation will be happy to answer any questions about how your credit score influences your mortgage rates. If you are seeking a mortgage in Mount Pleasant, South Carolina and are considering your credit score, contact our offices.

The Impact of Your Credit Score on Your Mortgage

The higher your credit score is, generally, the more your chances of getting a lower mortgage rate may improve. There are three different national credit bureaus that calculate your credit score: Experian, Equifax, and TransUnion. Each bureau may have a slightly different number, but the range is generally consistent. Mortgage lenders may check your scores and consider your income or other assets. Mortgage rates might move up if your score lowers by as little as 20 points. A 100-point drop could end up making your monthly mortgage payment go up, even just a little, but the extra cost can add up over time.

General Credit Score Rankings

Generally speaking, if your credit score is 740 or above, this is considered by some to be an excellent credit score. As you move downward to 660-700 range, the score may be considered good. If you are seeing that your score is 620 or lower, then you should consider consult with professionals to see whether you can qualify for various mortgage programs. Either way, it is always good to research or call Lucey Mortgage Corporation with questions, since other variables influence the ability to obtain a home loan.

How to Improve and Repair Your Credit

Since the score affects your mortgage rates, you should always seek to improve your credit. If your credit score is quite low, you may want to consult a professional about credit repair before applying for mortgage qualification. Here are some tips for improving your credit score:

  • You can seek out coaching or training on how to improve credit.
  • You can learn the dates on which the various creditors that you have report your balances, and aim to get them paid down before the reports are submitted.
  • You can take small or secured credit amounts out and pay them back quickly. You will want to use caution, and be sure that you do not open too many lines of credit. Consider using an existing credit card if you can.
  • You can review your credit score free online from many places, but be careful not to allow your credit to be pulled too often, as this may also affect your score.
  • If you see a blemish in your credit history, try contacting the company to clean it up, especially if it shows there may have been an error or identity theft.

Whether you feel your credit score is good, excellent, average, or worse—we welcome you to contact Lucey Mortgage Corporation in our Mount Pleasant, SC offices with your questions about mortgage rates. At Lucey Mortgage Corporation, we help our clients learn their options so that they can plan for their dreams and save!