Source: myFico Based on national average mortgage rates for a 30-year fixed, $300,000 mortgage as of October 28th, 2021.īased on the table above, your interest rate could be 1.589% lower if your credit score falls in the highest credit scoring range listed (760 and 850) versus the lowest (620 to 639).
This table that shows an estimate of how much your mortgage rate could be based on your FICO® score: It has a scoring model that ranges from 300 to 850, and is broken down into the following categories: The higher your credit score, the more likely you are to receive loan approval at low interest rates.Īlthough lenders use a variety of credit scoring models, one of the most widely used is FICO® Score. When you apply for one, a mortgage lender will review your credit score – a three-digit number based on information on your credit reports – to assess how risky of a borrower you may be. Why is it important to build good credit when buying a house?īuilding good credit is important when buying a house because it can help you qualify for a mortgage. We’ll cover that in this article, but first, it’s important to understand why building good credit is important. However, before you rush to add another credit card to your wallet, it’s important to understand when doing so could be a bad idea. After all, even if you have minimal or no credit history, you could qualify for a type of credit card designed to help you establish or rebuild credit. Are you searching for ways to build your credit before buying a house? Depending on when you plan on applying for a mortgage, a credit card could help you achieve your goal.
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