When you’re preparing to buy a home or refinance, your credit score is more than just a number—it’s a powerful factor that directly influences the mortgage rate you’ll receive. Even a small difference in your score can significantly affect your monthly payment and long-term costs. At Bankpricer, we want to help you understand how your credit score impacts your mortgage rate, and what you can do to put yourself in the best possible position before you apply.
Why Mortgage Rates Vary Based on Credit Scores
Lenders use your credit score to assess risk. A higher score signals that you’re more likely to repay your loan responsibly, which means you’re less risky to the lender. As a result, lenders are more willing to offer you a lower interest rate. On the flip side, a lower credit score can lead to higher rates—or even loan denial—because of the perceived risk.
Your mortgage rate is not one-size-fits-all. Instead, it’s tiered based on credit score brackets. This means someone with a score of 760+ could be offered a significantly better rate than someone with a score in the low 600s.
Credit Score Ranges and Their Typical Impact
Although the exact ranges can vary by lender, these general tiers are commonly used when determining mortgage rates:
- Excellent (760–850): Qualifies for the most competitive rates available.
- Very Good (720–759): Still qualifies for strong rates, slightly above the best offers.
- Good (680–719): Competitive rates are possible, but not the lowest.
- Fair (620–679): May qualify for a mortgage, but at higher rates.
- Poor (Below 620): Often ineligible for conventional loans without improvement.
Improving your score by even 20 to 40 points can make a real difference in the rate you’re offered. That’s why it pays—literally—to focus on your credit before applying.
How a Higher Credit Score Saves You Money
Here’s a quick example of how much your credit score can influence your mortgage costs:
Suppose you’re taking out a $300,000 30-year fixed mortgage.
- With a 760+ score, your rate might be 6.5%, leading to a monthly principal and interest payment of about $1,896.
- With a 660 score, your rate might rise to 7.5%, bumping that monthly payment to $2,098.
That’s a difference of over $70,000 in interest over the life of the loan—just because of credit score differences.
Tips to Improve Your Credit Before Applying
The good news is that you can take actionable steps to improve your credit score before applying for a mortgage. Here are a few strategies to consider:
Pay Down Credit Card Balances
High credit utilization (using more than 30% of your available credit) can drag your score down. Aim to pay off or reduce balances on revolving accounts before applying.
Check Your Credit Reports for Errors
Mistakes happen. Request a free copy of your credit reports from all three bureaus and dispute any inaccuracies that could be hurting your score.
Avoid Opening or Closing Accounts
Applying for new credit or closing old accounts can affect your credit history and utilization ratio. Avoid big changes until after your mortgage closes.
Make Every Payment On Time
Your payment history makes up the largest portion of your score. Set reminders or automatic payments to ensure you never miss a due date.
Using Bankpricer to Compare Rates Based on Your Credit Score
When you’re ready to explore your mortgage options, Bankpricer makes the process simple and transparent. Our platform allows you to:
- Compare mortgage rates from multiple lenders
- See how your credit score affects your rate and payment
- Understand your loan options based on your current credit tier
- Track rate trends and prepare for rate lock timing
By entering just a few key details, you can see personalized rates that reflect your credit standing—no guesswork, no hidden surprises.
Don’t Let Your Credit Score Hold You Back
Your credit score doesn’t have to be perfect, but the more you understand its role in mortgage approval, the better prepared you’ll be. Even small improvements can lead to big savings, and the first step is knowing where you stand.
Bankpricer gives you the tools to compare, evaluate, and move forward with confidence. Whether you’re buying your first home or refinancing, we’re here to help you make smarter, credit-conscious mortgage decisions.
Speak with a Mortgage Expert Today
If you’re unsure how your credit score may impact your mortgage rate or need help improving your financial profile, contact us today. A mortgage expert at Bankpricer can answer your questions and guide you through every step of the process. Take the guesswork out of rate shopping—and move one step closer to the home you deserve.