On this page
- What is a credit score?
- What is a good credit score?
- What are the three credit bureaus, and what do they do?
- How does your credit score affect your mortgage rate?
- Which credit score counts on a joint mortgage application?
- What are some of the mistakes people make that impact their credit score, but they don’t even know it?
- Are there things that can happen to make someone’s credit score plummet but they didn’t do anything to cause that?
- Quick ways to increase your credit score for a mortgage
- What are some of the other ways someone could increase their score?
Even though you might understand finances and banking, the link between your credit score and mortgage eligibility can still feel complex.
But understanding how your credit history can affect your eligibility and available interest rates can make things go much smoother.
Your credit score and your credit report are two separate things, according to the Consumer Financial Protection Bureau (CFPB). A scoring model calculates your credit score from the data in your credit report.
Having a higher credit score shows a stronger credit history which impresses lenders. That makes you more eligible for lower interest rates, so your overall payments could be less.
Your credit score is one of the most important numbers in a mortgage application. That’s according to Joni Utnage, Vice President & Mortgage Originator at Busey Home Mortgage in Champaign, Ill.
“Not only does your credit score affect your mortgage interest rate, it can also impact your rate for mortgage, car and home insurance, certain job prospects and even for the rental you want.”
What is a credit score?
“A credit score indicates to lenders how much of a credit risk you pose if they allow you to borrow money,” she says.
Credit scores reflect the information in your credit report. For example, do you pay your bills on time, and how much of your available credit do you use? Check your credit report for accuracy at least once a year.
What is a good credit score?
A credit score can range from 300 to 850, depending on the rating industry. A FICO® (Fair Isaac Corporation) Score of 670 or above counts as good, according to FICO. A score of 800 or above counts as exceptional.
FICO is the more widely known credit scoring option. However, Fannie Mae and Freddie Mac have accepted VantageScore 4.0 for loan decisions since April 2026. A VantageScore of 661 to 780 counts as prime, while one of 781 or higher is superprime.
See the score bands below from FICO and VantageScore:
FICO VANTAGESCORE
Exceptional 800-850 Superprime 781-850
Very Good 740-799 Prime 661-780
Good 670-739 Near prime 601-660
Fair 580-669 Subprime 300-600
Poor below 580
FICO and VantageScore use an algorithm that weighs many factors within your credit report to arrive at a score. The higher the score, the lower the credit risk to lenders, Utnage says.
What are the three credit bureaus, and what do they do?
In the U.S., there are three national credit bureaus: Equifax, Experian and TransUnion. They compete to capture, update and store credit histories on most consumers.
Most of the information the three credit bureaus collect on consumers is similar, but there are differences. As a result, there are different scores between the three.
How does your credit score affect your mortgage rate?
Interest rates and mortgage insurance rates use credit scores. For example, to have the best interest rate on a conventional loan, a person wants a score of at least 780. That’s the top credit score tier in Fannie Mae’s pricing matrix, updated September 30, 2026.
A lower score can mean higher rates on both the interest rate and on PMI, Utnage explains. It can also mean higher home insurance cost.
Which credit score counts on a joint mortgage application?
For pricing, mortgage lenders use the middle score of the weakest borrower, she says.
So, say a husband and wife apply jointly. The husband has a middle score of 680, and the wife has 800. In that case, the interest rate and private mortgage insurance rate will follow the lower score of the two.
Automated underwriting works differently. Fannie Mae’s Desktop Underwriter runs its own analysis of the credit report data rather than relying on the score.
What are some of the mistakes people make that impact their credit score, but they don’t even know it?
Utnage says that maxing out credit cards can impact the score almost as much as a missed payment. Disputing medical bills or erroneous bills can result in a collection on the credit report. Refusing any bill, erroneous or not, can do the same.
Also, when you buy a car the dealer usually sends the loan application to multiple sources to pull your credit. Instead, ask the dealer to limit the number of sources so you keep inquiries to a minimum.
Are there things that can happen to make someone’s credit score plummet but they didn’t do anything to cause that?
If your credit score drops, there is usually a cause. Although it may be hard to pinpoint the exact reason, here are some examples, Utnage adds:
- A store goes out of business and closes your card. If there is a balance, the store may let you continue paying it off. But the line stays closed, so the balance will always be the limit. You will always appear maxed out.
- A card issuer lowered your credit limit.
- Identity theft.
- Your lender sells your mortgage, and one account shows paid before the other shows open. This scenario could result in temporary drop, but it would be minor.
- A collection drops off of your credit report.
- Bankruptcy comes off your credit report. When a bankruptcy falls off of your credit report after up to 10 years, you will likely move to a new credit scorecard.
Quick ways to increase your credit score for a mortgage
Utnage says that someone can eliminate debt and reduce revolving debt to 30% of the limit. They can also increase credit limits on revolving cards and report errors in writing. Keep old accounts on your report, because a longer history helps the score. Finally, pay your bills on time or before the due date.
What are some of the other ways someone could increase their score?
“Becoming an authorized user on someone’s account can raise your score,” she says. “However, lenders are catching on. In some cases, it may not work in your favor due to manual underwriting requirements.”
You can also strategically open accounts and apply for credit sparingly, she adds.
