Whether you're a first-time homebuyer or preparing for your next move, your credit score plays a major role in the homebuying process. It can affect everything from the interest rate on your mortgage to the type of loan you qualify for — and even whether you’re approved at all.
Here’s why your credit score matters, how it impacts your home purchase, and what you can do to improve it.
Your credit score is a three-digit number (typically ranging from 300 to 850) that reflects how responsibly you manage debt. It’s based on your credit history, including:
Loan Approval
Most mortgage lenders have minimum credit score requirements. If your score is too low, you may not qualify at all — or only for certain types of loans (such as FHA).
Interest Rates
Your credit score directly affects the interest rate you're offered. A higher score usually means lower rates, which can save you tens of thousands of dollars over the life of your loan.
Credit ScoreEstimated Mortgage Rate Impact760+Best rates available700–759Very good rates660–699Average to good rates620–659Higher interest rates<620May require special loan programs
Loan Options
Certain loan programs (like conventional, FHA, VA, or USDA) have different credit requirements. A higher score can give you more flexibility to choose the best fit for your financial goals.
Private Mortgage Insurance (PMI) Costs
If you’re putting down less than 20%, you’ll likely pay PMI. A higher credit score can reduce your PMI rate, which lowers your monthly payment.
If your score isn’t quite where you want it, don’t worry — there are ways to improve it over time:
Even a small bump in your score can increase your buying power and lower your monthly costs.
Your credit score isn’t the only factor lenders consider, but it’s one of the most influential. Knowing where you stand — and taking steps to improve — can make a huge difference in your homebuying journey.
At The Keith Kennedy Group, we guide buyers through every step of the process, including preparing financially for a successful purchase. Need help understanding where you stand? We’re here to connect you with trusted lenders and credit resources.
Ready to buy but unsure about your credit? Let’s start with a conversation — and get you one step closer to your dream home.
Keep reading other bits of knowledge from our team.
Have a question about this article or want to learn more?