Everyone knows that having a high credit score will help you get approved for a mortgage, but did you know that good credit can lower your interest rate, too?

A high credit score could save you thousands of dollars over the life of your mortgage. Here’s how it works.

A snapshot of your credit history

A high credit score indicates that you pay your bills on time, don’t carry an excess of debt and have been responsible with paying off loans in the past. Good credit is a sign to lenders that you’re likely to repay your loan.

What is a good score?

Credit scores usually range from 300 to 850, and while lenders differ, a good score is typically in the range of 640 or higher.

Benefits of a high credit score

A higher credit score boosts a lender’s confidence that you will be able make your mortgage payments on time and not default on your loan. Your credit score can help you qualify for:

• Lower interest rates
• Lower fees
• Reduced down payment requirements

How do I find my credit score?

If you would like to see your credit score before you start shopping for a mortgage, you can often receive a free copy through your bank or credit card provider.

You are also entitled to obtain one free copy of your credit report every year from each of the three credit reporting agencies, Equifax, Experian and TransUnion. While your credit report does not include your overall credit score, it does include all the information used to calculate your score. It’s a smart idea to check your credit report every few years to look for red flags or discrepancies. You may have unresolved issues lowering your credit score that you are unaware of and fixing these problems can raise your score and lead to a better interest rate.

Solutions for low credit scores

If your credit score is under 640, you may find it harder to qualify for a loan or to find a loan with a good interest rate. However, a knowledgeable mortgage broker can help you find a solution. Mortgage brokers work with a wide range of wholesale lenders, many of which offer specialized loans for buyers with weaker credit. While mortgages for buyers with lower credit scores will come with higher interest rates, you can still get into the home you want now while working on your credit score to refinance at a better rate later.

To quickly see if you qualify for a better rate, talk to one of our mortgage brokers today or click HERE for our 60 second digital pre-approval.

Want to see if you qualify for a lower rate? Take our FREE online pre-approval, and find out in just 60 seconds how much you could be saving!

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