When you're looking to buy a house, it's important to understand that your credit score plays a big role in whether you can get a mortgage or not. Lenders look at your credit history to check if you're good at paying bills on time, handling debt, and other stuff like that. Plus, your credit score affects the interest rate you'll get on your mortgage. According to a piece on this topic by US Bank:

““A credit score isn’t the only deciding factor on your mortgage application, but it’s a significant one. So, when you’re house shopping, it’s important to know where your credit stands and how to use it to get the best mortgage rate possible.”
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— US Bank

So, basically, your credit score is pretty crucial if you're looking to buy a home these days because mortgage rates play a big role in how affordable your loan will be. The Federal Reserve Bank of New York says that the average credit score for folks getting a mortgage is 770. But hey, don't stress if your score isn't flawless. According to a piece from US Bank, perfection isn't necessary.

““Your credit score (commonly called a FICO Score) can range from 300 at the low end to 850 at the high end. A score of 740 or above is generally considered very good, but you don’t need that score or above to buy a home.”
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— US Bank

When you team up with a reliable lender, you can learn a lot more about how your credit score might influence your home loan and the interest rate you qualify for. Just like FICO points out:

““While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”
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— FICO

If you're aiming to boost your score, Experian points out a few key areas you might want to work on.

• Your Payment History: Late payments can really hurt your credit score. Just make sure to pay on time and settle any late fees promptly to avoid any issues.

• Your Debt Amount (relative to your credit limits): When it comes to the amount of credit you're currently using, try to keep it on the lower side. The lower, the better! Just focus on keeping this number as low as you can.

• Credit Applications: If you're thinking about making a purchase, it's best to hold off on applying for more credit. Whenever you apply for new credit, it might lead to a hard inquiry on your credit report, which could cause your credit score to decrease.

Bottom Line

Improving your credit score could potentially help you secure a more favorable mortgage rate. If you're interested in finding out more, it might be a good idea to reach out to a reliable lender for guidance.