Your credit score is one of the biggest levers on your mortgage rate. A difference of 100 points can mean a rate gap of 0.5–1.0% — which sounds small but translates to tens of thousands of dollars over 30 years on a typical loan.
How Credit Score Affects Your Rate
Lenders use a tiered pricing model. Here's a rough example for a $400,000 30-year conventional loan:
| FICO score | Approx. rate | Monthly P&I | Total interest (30yr) |
|---|---|---|---|
| 760–850 | 6.75% | $2,594 | $533,800 |
| 700–759 | 7.00% | $2,661 | $558,000 |
| 680–699 | 7.25% | $2,728 | $582,100 |
| 660–679 | 7.50% | $2,797 | $606,800 |
| 620–659 | 8.00% | $2,935 | $656,600 |
Going from 660 to 760 — a 100-point jump — saves roughly $73,000 in total interest and $200/month on that loan.
Which Credit Score Do Lenders Use?
Mortgage lenders pull all three bureau scores (Equifax, Experian, TransUnion) and use the middle scoreof the three. If you're applying jointly, they use the lower of the two middle scores. This is why improving the lower-scoring borrower's credit can be especially valuable before applying.
What Actually Moves Your Credit Score
FICO scores are driven by five factors:
- Payment history (35%) — the single biggest factor. One 30-day late payment can drop your score 60–110 points.
- Credit utilization (30%)— how much of your available revolving credit you're using. Aim for under 10% before applying.
- Length of credit history (15%)— older accounts help. Don't close old cards.
- Credit mix (10%) — having both revolving (cards) and installment (auto, student loans) accounts is modestly positive.
- New credit (10%) — each new application causes a small, temporary dip.
Moves That Actually Help Before Applying
The biggest quick wins, roughly in order of impact:
- Pay down revolving balances. Getting utilization from 40% to under 10% can add 30–60 points within a billing cycle.
- Dispute errors.Pull free reports from AnnualCreditReport.com and dispute any inaccuracies — wrong balances, accounts that aren't yours, duplicate entries.
- Don't open new accounts. Hard inquiries temporarily lower your score. Avoid new cards, auto loans, or any applications for 6–12 months before mortgage shopping.
- Keep old accounts open. Closing an old card shortens average account age and increases utilization.
- Get added as an authorized user.Being added to someone else's old, well-managed card can boost your average account age.
Rate Shopping Doesn't Hurt Your Score
Many buyers avoid getting multiple quotes because they're afraid multiple credit pulls will tank their score. This is a myth. FICO treats all mortgage-related inquiries within a 45-day window as a single inquiry. Always get quotes from at least 3 lenders — the potential rate savings vastly outweigh any score impact.