Credit Score Ranges

Everyone knows your credit score is an important part of getting a new mortgage. Every mortgage lender you apply with will obtain your credit report, review your credit history and your credit score.

Lenders have what’s called “credit score ranges” when it comes to approving a mortgage application. A credit score range in the mortgage industry simply is the grouping of credit scores into levels to determine risk. A group of lower credit scores is “riskier” than a group of higher credit scores. 

What Impacts Your Credit Score?

Before we get to what those ranges are it’s important to point out what impacts your credit score. According to the credit bureau Experian there are five main credit score factors.

Payment history. Payment history is the most important ingredient in credit scoring, and even one missed payment can have a negative impact on your score. Lenders want to be sure that you will pay back your debt, and on time, when they are considering you for new credit. Payment history accounts for 35% of your FICO® Score☉ , the credit score used by most lenders.

Amounts owed. Your credit usage, particularly as represented by your credit utilization ratio, is the next most important factor in your credit scores. Your credit utilization ratio is calculated by dividing the total revolving credit you are currently using by the total of all your revolving credit limits. This ratio looks at how much of your available credit you’re utilizing and can give a snapshot of how reliant you are on non-cash funds. Using more than 30% of your available credit is a negative to creditors. Credit utilization accounts for 30% of your FICO® Score.

Credit history length. How long you’ve held credit accounts makes up 15% of your FICO® Score. This includes the age of your oldest credit account, the age of your newest credit account and the average age of all your accounts. Generally, the longer your credit history, the higher your credit scores.

Credit mix. People with top credit scores often carry a diverse portfolio of credit accounts, which might include a car loan, credit card, student loan, mortgage or other credit products. Credit scoring models consider the types of accounts and how many of each you have as an indication of how well you manage a wide range of credit products. Credit mix accounts for 10% of your FICO® Score.

New credit. The number of credit accounts you’ve recently opened, as well as the number of hard inquiries lenders make when you apply for credit, accounts for 10% of your FICO® Score. Too many accounts or inquiries can indicate increased risk, and as such can hurt your credit score. 

Source: Experian

The above guide for what impacts your credit score is also found on other financial websites like credit karma. They also place Payment History at the top of the list.

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Credit Score Ranges

Here are the credit score ranges most mortgage lenders use;

  • 740+
  • 739 – 720 
  • 719 – 700 
  • 699 – 680
  • 679 – 660 
  • 659 – 640 
  • 639 – 620 
  • 619 or lower

The above ranges are for Conforming and FHA home loans. When it comes to Jumbo home loans, there usually is another tier at 760, 780 and 800.

Understanding The Credit Score Ranges

Starting from the top; the 740+ range is the best range to be in. Having a 740 credit score (or higher) will put you in the best position to get the lowest rate possible. 740 or higher is considered “excellent credit”

The next two levels down (739 – 720 and 719 – 700) are  considered “good credit” by most standards and homeowner’s in these two ranges will get rates just a bit higher than those homeowners with a 740 or higher credit score.

When you fall below a 700 credit score things start to change more significantly. Rates and fees typically move higher. The 699 – 680 range is considered “average” credit, 679 – 660 along with 659 – 640 is below average credit.

When you go below a 640 credit score that is generally considered “poor” credit in the mortgage industry.

When Can a 680 Score Get The Same Rate As A 740 Credit Score?

There are instances where a 680 credit score is the same as a 740 credit score (when it comes to a mortgage rate).

If you are doing a 30-year fixed-rate mortgage and have 40% equity and a 680 credit score then you will still get the best rates offered to someone with a 740+ credit score (all other things being equal).

Another scenario is on a 15-year fixed-rate mortgage. Credit score ranges usually don’t apply to 15-year fixed-rate mortgages.

Other Items That Impact Your Mortgage Rate

So lets say that you have that 740+ credit score, does that mean you automatically get approved at the best rate possible?


Other things like payment history, number of accounts open, down payment (or equity), debt-to-income ratio and more also go into getting a mortgage application approved.

Your credit score is just one part of the process (a big part). 

Ways To Improve Your Credit Score

If you are below the 740+ credit score range then you might want to consider taking certain steps to improve your credit rating. Here are a few simple things you can do to improve your credit score range.

  • Make all your payments on time.
  • Pay off some of your debt BEFORE your bill cycles: Everyone will tell you to payoff your debt to improve your credit score but what they don’t tell you is that you sometimes don’t have to pay it all off to see an improvement and they don’t tell you to make that payment BEFORE your bill cycles.
    • If you have credit card balances above 50% of the credit limit, try to pay them down to below 50% of the credit limit. And if you can get them below 35% even better.
    • If you pay down your debt before your bill cycles than that payment will reflect faster on your credit report.
  • Be careful with the number of credit cards you apply for: Avoid applying for lots of credit cards. In fact once you have 2-4 you probably should stop applying for new ones if you are trying to improve your credit.
  • Avoid collection accounts: If you are on the verge of having an account go to collections, do everything you can to avoid that.

Having a good credit score is a great way to get a low mortgage rate. If you are thinking about applying for a mortgage be sure to take the time to review your credit history and your credit score.

Loan Officer Kevin O'Connor

About The Author

Loan Officer Kevin O'Connor has over 17+ years of experience as a Mortgage Loan Originator and is licensed by the state of California and the Nationwide Mortgage Licensing System. He has a top rating with the Better Business Bureau, Google, Yelp, and Zillow. CA DRE #01499872 / NMLS #247447

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