Your credit score plays a big role in what interest rate you’ll qualify for. Learn how lenders view credit, what score ranges matter most, and practical steps you can take to improve your rate.
Why Credit Scores Matter
When you apply for a mortgage, lenders look at your credit score as a measure of how risky it is to lend to you. The higher your score, the more confident lenders feel, and the better the rate you’re likely to receive. Even a small difference in your interest rate can translate into thousands of dollars saved over the life of your loan.
What Score Ranges Mean
Here’s how most lenders view credit score ranges:
- 760 and above: Excellent credit – qualifies for the best rates.
- 700–759: Good credit – solid rates, though not the absolute lowest.
- 660–699: Fair credit – higher rates, but still mortgage-eligible.
- 620–659: Minimum conventional loan range – limited options.
- Below 620: FHA, VA, or specialty programs may still be available.
How Credit Affects Your Rate
A borrower with a 760 credit score might lock in a much lower interest rate than someone with a 660 score. That difference can raise or lower your monthly payment by hundreds of dollars, directly impacting how much home you can afford in Vero Beach’s competitive market.
Steps to Improve Your Credit Score
If your score isn’t where you’d like it to be, there are practical ways to improve it before applying for a mortgage:
- Pay down credit card balances.
- Avoid opening new credit accounts before applying.
- Make payments on time, every time.
- Check your credit report for errors and dispute inaccuracies.
Bottom line: Your credit score is one of the biggest factors in determining your mortgage rate. By understanding how it’s calculated and taking steps to improve it, you can save money and expand your buying power.