How to Get Your Credit Scores High and Get Lower Interest Rates

Want to get a better mortgage rate to help you buy more house? The first thing you need to do is get a higher credit score.

Don’t know how? Well, here’s some important information that’ll definitely help you. FICO scores (credit score) are what the vast majority of our mortgage lenders use to evaluate home loan applicants' credit worthiness. The scores are based on a number of factors that analyze the electronic credit files maintained on virtually all adults in the U.S..

The scores range from the 300s to around 850, with higher scores indicating lower risk. Many lenders reserve their most favorable quotes rates and fees for applicants in the upper FICO score ranges, 700 and above.

Mortgage applicants in the low 600s and below get progressively higher rate quotes and are charged higher loan fees.

Your FICO score only looks at information in your credit report. However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting. Your score considers both positive and negative information in your credit report. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will raise your score. Your score takes into account:

Payment information on may types of accounts, including credit cards, retail accounts, car and mortgage loans.

  • Public record and collection items such as bankruptcies, foreclosures, suits, wage attachments, liens and judgments.
  • Details on late or missed payments (“delinquencies”) specifically, how late they were, how much was owed, how recently they occurred and how many there are.
  • How many accounts show no late payments.
  • Length of credit history.
  • Payment information on may types of accounts, including credit cards, retail accounts, car and mortgage loans.

How scores are established:

Approximately 15% of your score is based on your credit history. Generally a longer credit history will increase your score. The score considers both the age of your oldest account and an average age of all your accounts.

10% of your score is based on new credit or if you are taking on new debt. Opening a couple of new credit lines in a short period will hurt this score. If you are planning on buying real estate in the near future, put off buying a car until after it closes. A new car loan can have a big impact on what price of house you can qualify for.

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