Get Better Mortgage Rates If You Improve Your Credit Score

In what might feel like a cruel plot to keep home buyers stuck and unable to actually buy a home, lenders use factors including your credit score to determine your mortgage rates. You need to take a look at your credit score early in the game. You might need to clear some errors up on the credit report. It’s not uncommon, but it’s best handled before you start applying for mortgages. Why? The worse your credit, the higher it will raise your rate. The higher your rate is, the more you will pay monthly. The more you pay monthly, the higher your debt-to-income ratio becomes. Worse yet, a high debt-to-income ratio can make it so that you can’t even get approved for many loans.

Equifax, Experian and TransUnion

So, get your hands on an updated version of your credit report from each of the three major reporting bureaus if you can. They may have slightly different data. The three bureaus are Equifax, Experian and TransUnion. Sometimes errors or bad ratings won’t appear on all three of their reports. You never know which bureau your lender will choose, so it’s best to know what you are dealing with in advance.

Check Your Credit Report For Errors

You really should check for errors. If you find something on your report that simply shouldn’t be there, address it. I knew a woman who hit a snag in the application process for a loan on her dream home. Her previous bankruptcy had one minor point on it that appeared unresolved. It was actually long resolved, the resolution hadn’t been reflected in the credit report though. It would have cost her the chance to buy her home. One quick email to her old bankruptcy lawyer and it was all cleared up. Sometimes, the errors are less obvious, so check everything on the report! You can always contact the credit bureau and ask them to remove the derogatory mark on your credit report. Keep in mind that you will have if you have the same error on multiple reports, you will have to address the issue with each bureau individually.

Credit Ratios

Take note of how much of your credit line you are actually using. If you’re close to the 30 percent ratio, it might be worth altering your budget slightly if possible to get the credit line to a 30 percent or less ratio. When you lower your minimum monthly credit card payment by paying off a big chunk, you actually increase your maximum home price a bank will allow, plus your credit score will go up!

Explaining Yourself

Keep in mind that if you find a negative remark on your report that is accurate, you can still consider writing a brief explanation to the lender. Underwriters can and do sometimes offer exceptions for exceptional situations. If you can raise your credit score by making even a few minor changes to your credit report, it can have a significant impact on your long term financial situation, lower your mortgage rates and help you get into a new home.

If you would like to get a preapproval or discuss options with a loan officer, let us know so that we can connect you with a reputable loan officer that we have worked with previously and trust.


If you’re interested in selling a Tampa Bay area home, please contact us for more information about listing your home. Check out our helpful article describing the process and how to decide if it’s the right time to sell.


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Our experienced agents know the area and would love to find you the perfect home in the Tampa Bay or any of the surrounding areas.  When you’re ready, call us at 813-961-6000, or contact us online. We handle real estate in Hillsborough County (the Tampa – St. Petersburg – Clearwater metropolitan area), real estate in Pasco County (Port Richey, New Port Richey, Dade City, Zephyrhills and San Antonio), and real estate in Pinellas County (Tampa – St. Petersburg metropolitan area.) We’ll help you find the right home for your needs!