How to Improve Your Credit Score for a Better Mortgage Rate
Your credit score doesn’t just determine whether you qualify for a mortgage - it directly affects how much you’ll pay every month and how much interest you’ll pay over the life of the loan.
Even a small credit score improvement can move you into a better pricing tier, lowering your interest rate and increasing your buying power. In this guide, we’ll break down how mortgage lenders use credit scores, the fastest ways to improve yours, and how to decide when you’re ready to apply.
How Mortgage Lenders Use Credit Scores
Mortgage lenders don’t look at your credit score the same way credit card companies do. Instead of using a single score, lenders typically pull credit reports from all three major bureaus and use your middle mortgage score.
Your score is then placed into pricing tiers. These tiers determine what interest rate adjustments apply to your loan. Moving from one tier to the next often matters more than large improvements within the same tier.
Credit Score Ranges That Affect Mortgage Rates
- Below 620: Limited options, higher rates, or denial
- 620–659: Entry-level approval with rate surcharges
- 660–699: Improved pricing, still above best rates
- 700–739: Strong approval and competitive rates
- 740+: Best available mortgage pricing
If you’re close to the next tier, delaying your application to improve your score can pay off significantly.
How Much a Better Credit Score Can Save You
A higher credit score can reduce your interest rate by fractions of a percent - but those fractions compound over decades.
Even a 0.50% lower rate can save tens of thousands of dollars over a 30-year mortgage. You can model the difference using our mortgage payment calculator.
What Impacts Your Credit Score the Most
- Payment history: On-time payments matter most
- Credit utilization: Balances vs limits
- Length of credit history: Older accounts help
- Credit mix: Revolving and installment accounts
- New credit: Recent inquiries and accounts
Fastest Ways to Improve Your Credit Score Before Applying
- Pay down credit card balances below 30% utilization
- Correct errors on your credit report
- Avoid new credit inquiries
- Make every payment on time - no exceptions
- Keep older accounts open
What Not to Do Before Applying for a Mortgage
- Open new credit cards or loans
- Close old accounts
- Miss even one payment
- Co-sign for someone else’s loan
How Long It Takes to Improve Your Credit Score
- 30 days: Utilization changes
- 60–90 days: Meaningful score movement
- 3–6 months: Tier-level improvements
Real-Life Credit Improvement Scenarios
Borrowers who focus on utilization and payment history often see the fastest gains. In many cases, delaying an application by a few months leads to better rates and lower payments.
How Credit Scores Affect Home Affordability
Better credit doesn’t just lower rates - it increases how much home you can afford. Lower payments improve your debt-to-income ratio and expand your buying range.
Start with Home Buying Process & Affordability to see how credit, income, and debt work together.
Credit Score & Mortgage FAQs
What credit score do I need for the best mortgage rate?
Most lenders offer their best pricing to borrowers with scores of 740 or higher, though improvements at any tier can help.
Is it worth delaying a home purchase to improve credit?
Often yes - especially if you’re close to a pricing threshold. Lower rates can reduce monthly payments and long-term interest.
Ready to See How Your Credit Affects Your Payment?
Compare scenarios at different credit score levels and see how small improvements can change your mortgage payment.