News by Subject
Complete list of specialty news sections.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Mortgage Industry News
Subscription-based news for people who work in real estate finance.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from

Mortgage News Reprints
Put entire stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed stories for your web site or for your RSS reader.

News Archives
Archive of news entries.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Graphs
Directory of lenders, branch operators and mortgage service providers.
home advertise email RSS about us
HOT Topics Rates Glossary LO License Search
Consumer Mortgage News
Free mortgage news for current and prospective borrowers from a leading online mortgage industry news publication.

How Credit Scores Impact Mortgage Rates

Sheyna Steiner: How your credit score affects your mortgage rate

Feb. 19, 2016

By SHEYNA STEINER - Tribune News Service

The most influential determinant of your mortgage rate is your credit score.

The higher your credit score, the lower the interest rate on the mortgage.

How Credit Scores Affect mortgage Rates
Borrowers with high credit scores tend to get lower interest rates on mortgages than borrowers with low credit scores.
  • A credit score of 740 or higher qualifies for the best interest rates from most lenders.

  • It is difficult, but possible, to get a mortgage with a credit score under 620.

  • The difference between the best and worst rates can vary by a full percentage point and a half.
Not only is a high credit score vital in getting a low mortgage rate, it influences whether you can get a home loan at all.

Buyers below a certain threshold, typically a FICO score of 620, have a better chance of striking oil in their bathtub than securing a mortgage. It's possible, but it will require some digging.

A credit score of 740 or more should qualify for the best mortgage rates from most lenders.

Depending on the lender, the mortgage rates offered to the highest and lowest credit tiers can vary as much as a full percentage point and a half, says Louis Spagnuolo, a former vice president of mortgage banking at WCS Lending in Boca Raton, Florida.

What Lenders Look For
Lenders prefer borrowers with low balances, a long history of on-time payments and a mix of credit utilization -- for instance, a car loan and a couple of revolving accounts such as credit cards.

"Lenders look at several variables on the credit report: outstanding debt, the outstanding debt relative to the total available debt; the length of the credit history, and the pursuit of new credit -- how many inquiries are on your report," says Matt Hackett, underwriting manager at Equity Now, a direct mortgage lender in New York.

How to Clean Up Your Credit
Ideally, you'll check your credit report a year or so before buying a home.

That gives you time to correct errors in the report and change ways you use credit to improve your score.

Scour everything from the way your name is spelled and previous addresses to checking that each and every account is yours and reported correctly. If an account has been closed, make sure that is accurately reported.

"Sometimes people will quickly glance over their information and that's it. But you should take the time and look at the account numbers," says Steve Katz, senior marketing communications executive for TransUnion.

Correct and Wait
All three credit bureaus make it easy to dispute errors online.

If everything is correct, pay down balances and let time do the rest.

The credit reporting agencies do charge a fee if you want to know your credit score. Lenders look at all three scores and use the middle one, Hackett says.

What Else You Can Do
If you're buying a home soon, try not to apply for new credit.

Though it's not always avoidable -- for instance, if you need a car loan or college financing -- you should resist opening several new lines of credit in a short time. Multiple new accounts can decrease your credit score.

next story

back to home page

To see more of or to subscribe to the newspaper, go to

Copyright (c) 2016,

Distributed by Tribune News Service.

This story was distributed by TNS - Tribune News Service
Refinance News
News about refinance programs, pricing and production.
H A R P 2.0 News
News stories about the H o m e Affordable Refinance Program including expanded program guidelines.

Copyright © 2016 Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

pricing engine directory

wholesale lender directory

More Mortgage News Resources ( full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

free mortgage news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

refinance news

reverse mortgage news

sales blog

secondary marketing

servicing news

subprime news

wholesale lenders

wireless mortgage news