How Does My Credit Score Impact My Mortgage Interest Rate?

By Bob Redtree

To a very large extent your credit score will impact your mortgage interest rate. In fact, one of the first things you should determine in advance of taking out a mortgage is, “How does my credit score impact my mortgage interest rate?” In summary, the better your credit score, the lower interest rates you should expect to have to pay.

Exactly How Does My Credit Score Impact My Mortgage Interest Rate?

While rates vary, and it is difficult to give an exact number when it comes to determining what interest you will pay, generally speaking it depend on whether your credit grade. Borrower’s credit is often given a grade, comparable to grades given in school where an “A” is excellent, “B” good, “C” not very good, and “D” poor. For example, someone with a credit grade “A” will have no credit items. A person with a “B” grade will perhaps have one or two overdue payments on record. If you have a “C” you likely have quite a few late payments pending, and a “D” indicates many payments owed or bankruptcy declared.

So in answer to the question, “How Does My Credit Score Impact My Mortgage Interest Rate?”, those with a “A” rating could pay as little as .5% interest, a “B” rating could mean paying up to 2% interest, a “C” rating may pay up to 3% interest, and those unfortunate enough to be rated “D” can be expected to pay up to 5% interest on their mortgage. Obviously those with “C” or “D” ratings may also have a more difficult time securing a mortgage than those with excellent to very good credit scores.

How Does Your Mortgage Payments Influence Your Credit Score?

Equally as important as asking, “How Does My Credit Score Impact My Mortgage Interest Rate?” is the question regarding how your mortgage will affect your credit score. Generally, making your mortgage payments on time will impact your credit score in a very positive manner, and failure to meet your payments could result in a lower credit score over time.

Related posts:

1. How Does My Credit Score Impact My Mortgage Interest Rate?
2. How Does My Credit Score Impact My Ability To Get A Mortgage Loan?
3. Does My Credit Score Affect My Mortgage Rate?
4. Does Having A High Credit Score Decrease My Mortgage Rate?
5. Can a Great Credit Score Guarantee the Best Mortgage Rates?