When it comes to getting a mortgage, your credit score plays a bigger role than you might think. It determines the interest rate and loan terms you're offered, making it one of the most important factors in the homebuying process. To break it down, we sat down with our mortgage lending expert, Brandon, to explain how your credit score can impact your mortgage. Learn what you can do to make sure it is working in your favor.
Watch the full video or read the key takeaways below to get all the details.
Why Does Your Credit Score Matter?
Your credit score gives lenders an idea of how risky it might be to lend you money. The higher your score, the lower the risk. And when lenders see less risk, you are often offered a lower mortgage interest rate. If your credit score is lower, you may be offered a higher rate because of the added risk from the lender’s perspective.
When Should You Check Your Score?
Even if you are just starting to think about buying a home, checking your credit score early can help you prepare for what is ahead. Here are a few free and reliable resources to get started:
Resources for Checking Your Credit Score:
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AnnualCreditReport.com - This is the only federally authorized site where you can access your credit reports from Equifax, Experian, and TransUnion for free. You are entitled to one free report from each bureau every 12 months.
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Credit Karma - Offers free credit scores and credit monitoring with insights from TransUnion and Equifax. You will also get alerts about changes to your credit.
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Experian Free Credit Score - Allows you to check your credit score for free and includes tools to help you understand what is influencing it.
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Rocket Money Members - If you use Rocket Money to manage your finances, they offer access to your credit score for free as part of their membership.
What Can You Do to Improve It?
One of the most helpful things you can do is make your payments on time. Timely payments show lenders that you are dependable and responsible. It is also helpful to avoid taking on new debt and to pay down existing balances when possible.
Using a secured credit card can be also be a smart option. This type of card works like a regular credit card but it is backed by a deposit that acts as collateral. With consistent on time payments and low credit usage, a secured credit card can help improve your score over time. Learn more about how secured cards work here.
Another helpful strategy is exploring credit builder loans or share secured loans. A credit builder loan lets you build a history of on time payments without needing money upfront, while a share secured loan uses savings you already have as collateral. Both options support credit growth through steady, manageable payments. Read more about the pros and cons of each here.
Give It Time
"The two most powerful warriors are patience and time."
Credit improvement takes patience. It is not something that happens overnight, and future homeowners should be prepared to give it time. In many cases, it may take six to twelve months of consistent progress before you see a meaningful change in your score. Starting early gives you the best chance of being in a stronger financial position when you are ready to apply for a mortgage.
Thinking About Your Next Move?
Understanding your credit score is just one piece of the homebuying puzzle. If you want to learn more about how mortgage rates work, check out our blog, 10 Tips to Get the Best Mortgage Rates in Florida.
And if you missed it, be sure to hear from our other mortgage expert, Jonny, in the first video of this series: Mortgage Basics: Your Top Questions Answered. Both are great starting points as you begin your journey toward homeownership.