How Credit Scores Affect Mortgage Rates


Mortgage loan officer meeting with a couple regarding financing a home
Consumers home loans

We’d love to help you with a mortgage or home equity line of credit.

The higher your credit score, the greater your savings on home loan interest—see how much.

It’s common knowledge that credit scores affect the mortgage interest rates borrowers qualify for but just how much? Let’s take a look.

Understanding creditworthiness

When considering a loan application, one of the key things lenders look at is the applicant’s creditworthiness. A lender wants to know if the potential borrower has sufficient income to repay the loan and a good track record of repaying debt. Credit scores reflect past history of repaying debt, and that’s why lenders give them so much weight in lending decisions.

Minimum credit scores for home loans

The minimum credit score required varies by loan type. FHA home loans are available to those with a score of 580. Conventional loans call for at least 620. And a lender issuing a jumbo loan generally looks for a score of at least 700.

What credit scores mean to mortgage rates

While mortgage interest rates change frequently, here’s an example of how rates on a 30-year fixed rate $300,000 mortgage in Michigan looked at the end of October:


FICO Score APR Monthly Payment
760-850 7.246% $2,046
700-759 7.462% $2,090
680-699 7.634% $2,125
660-679 7.842% $2,168
640-659 8.260% $2,256
620-639 8.791% $2,369

Source: myFICO/Curinos LLC, October 30, 2023

From the data in our example above, we see there’s a spread of $323 in the monthly payments between the highest and lowest credit scores. The biggest difference shows up in the lower two levels, where moving from a score of 639 to 640 saves the borrower $113 a month. Between the top two levels, increasing a score of 759 to 760 results in monthly savings of $44.

Using our mortgage calculator, we can figure the savings over the life of the loan. At a rate of 7.246%, total interest will be $436,462. At the opposite end, a rate of 8.791% will result in a total of $522,803. A borrower with the highest credit score will save $86,341 over 30 years compared to a borrower with the lowest credit scores.

Higher credit score mean savings for borrowers

Higher credit scores are always more beneficial for borrowers. If you’re looking to build credit from scratch or improve a low credit score, check out our blog, How Long Does It Take to Improve Your Credit Score?

All lenders are not equal

At Consumers, our mortgage loan officers live and work in your community. Unlike bigger lenders who are often out-of-state, we give every application personal attention—a human reviews each one.

If you have a high credit score, the mortgage process can proceed quickly. If your score is not so high, we’ll work with you to understand your history before making a lending decision. In many cases, we can offer a loan when other lenders would reject an application based on credit score only.

When you’re ready to apply for home loan, be sure to check out Consumers first. We’d love to help you get the home of your dreams.


Equal Housing Opportunity Logo with white background and black text and image. 

All loans subject to approval. Rates, terms and conditions are subject to change and may vary based on credit worthiness, qualifications and collateral conditions.

Consumers home loans

We’d love to help you with a mortgage or home equity line of credit.

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