- Impact on Mortgage Approval:
- Lenders use credit scores to assess your creditworthiness.
- Higher scores increase your chances of mortgage approval and better loan terms.
- Influence on Interest Rates:
- Credit scores affect the interest rate offered by lenders.
- Higher scores can lead to lower interest rates, saving you money over the life of the loan.
- Improving Your Credit Score:
- Pay bills on time and reduce outstanding debt.
- Avoid opening new credit accounts before applying for a mortgage.
- Regularly check your credit report for errors and dispute inaccuracies.
- Understanding Credit Score Ranges:
- Excellent (720-850): Best loan terms and interest rates.
- Good (680-719): Competitive rates and favorable terms.
- Fair (620-679): Higher interest rates and limited loan options.
- Poor (below 620): Difficulty in securing a mortgage and higher costs.