Why Does Your Credit Score Matter Before Getting a Mortgage?

Posted on July 23, 2025

Before purchasing a home in Utah, it’s important to check your credit score. While it may not be as exciting as actually shopping for the home itself, your credit score plays a key role in determining how much house you can afford, whether you qualify for a mortgage, and what the cost of that mortgage will be.

This blog post covers the significance of your credit score, what lenders evaluate, how a mortgage broker in Utah—like Associated Mortgage—can help, and most importantly, how to get ready to qualify for the best mortgage terms possible. Let’s dive in.

What Is a Credit Score?

A credit score is a three-digit number (typically ranging from 300 to 850) that reflects how likely you are to repay borrowed money. Lenders, including banks and mortgage companies, use this score to evaluate your creditworthiness. The higher your score, the more likely you are to qualify for loans and get better interest rates.

Your credit score is based on several key factors:

– Payment History – Do you pay your bills on time?

– Credit Utilization – How much of your available credit are you using?

– Length of Credit History – How long have you had credit accounts?

– New Credit – Have you recently opened multiple new accounts?

– Credit Mix – Do you have a variety of credit types (e.g., credit cards, car loans)?

Each of these elements impacts your score. For example, missing payments can hurt your score, while consistent on-time payments help build it. A strong credit score increases your chances of getting approved for a loan and securing lower interest rates—saving you money in the long run. Conversely, a low score may limit your options and increase monthly payments.

If you’re planning to buy a home in Utah, checking your credit score is a smart first step. A mortgage broker like Associated Mortgage can help assess your score and guide you on what to do before applying for a loan.

Why Your Credit Score Matters When Applying for a Mortgage

A mortgage is often the largest debt you’ll take on, so your credit score plays a critical role. But how much does it matter—and why?

Let’s break it down:

a. Approval

Each lender has different minimum credit score requirements. Some offer flexibility, especially with government-backed loans, but a higher score gives you a better shot at quick approval and more favorable terms.

b. Interest Rate

Your credit score heavily influences the interest rate you’re offered:

760–850: Best available rates
700–759: Very good rates
650–699: Moderate rates
Below 650: Higher rates and more expensive loans

Even a small difference in interest rate—such as 0.25%—can cost thousands over a 30-year loan.

c. Loan Types & Terms

Government programs like FHA or VA loans allow for lower scores, but higher scores give you access to more options, lower down payments, and better rates.

d. Private Mortgage Insurance (PMI)

If your down payment is less than 20%, PMI is often required. However, a higher credit score can lower your PMI costs.

e. Negotiating Power

A strong credit score gives you more leverage when comparing lenders and negotiating terms. This is where working with a knowledgeable mortgage broker in Utah—like Associated Mortgage—can make all the difference.

How Lenders Use Credit Scores

Lenders rely on credit scores to gauge risk. Here’s how they typically categorize borrowers:

1. Exceptional (800 and above) – Access to top-tier rates and premium loan products.

2. Very Good (740–799) – Strong borrower profile with competitive rate options.

3. Good (670–739) – Still eligible, though rates may be slightly higher.

4. Fair (580–669) – May qualify for certain programs (like FHA) but with higher rates.

5. Poor (Below 580) – Approval is difficult, and terms are generally costly.

Knowing where you fall can help you work toward a better deal. A local mortgage expert, such as Associated Mortgage, can help tailor your loan strategy based on your credit tier.

What Does the Associated Mortgage Website Offer?

For Utah homebuyers, Associated Mortgage is a trusted resource. Whether you’re buying your first home or improving your credit, their website offers tools and services to help simplify the process:

1. Personalized Pre-Approval
Quickly see how much home you can afford and show sellers you’re a serious buyer.

2. Multiple Loan Options
From fixed and adjustable-rate mortgages to FHA, VA, USDA, and jumbo loans—find the best fit for your needs.

3. Rate Comparison Tool
Compare interest rates and monthly payments across loan types to avoid surprises.

4. Credit Score Guidance
Learn how to check and improve your score to qualify for better rates.

5. Local Market Insight
With expertise in all areas, they offer tailored loan solutions for Utah buyers.

6. Online Tools
Estimate your budget, calculate payments, or explore refinancing options—all in one place.

How to Improve Your Credit Score

Improving your credit score takes time, but even small steps can make a big difference. Here’s how to get started:

a. Review Your Credit Reports

Request free reports from Experian, Equifax, and TransUnion. Dispute any errors you find—such as incorrect late payments or unfamiliar accounts.

b. Pay On Time

Set up autopay or reminders to avoid missed payments. Timely payments are the most important factor in building your score.

c. Lower Credit Card Balances

Keep balances under 30% of your credit limit—ideally under 10%.

d. Avoid New Credit Applications

Opening new credit accounts temporarily lowers your score, so hold off before applying for a mortgage.

e. Keep Old Accounts Open

Longer credit histories are better. Unless absolutely necessary, don’t close your oldest cards.

f. Diversify Your Credit

If you only use credit cards, consider adding a small installment loan—like a credit-builder loan—for a healthier mix.

Need help? A mortgage broker like Associated Mortgage can assist in building your score before applying.

Frequently Asked Questions

1. What’s the minimum credit score to buy a home?

Most lenders look for at least 620, though FHA loans may allow 580. Higher scores open the door to better rates and more loan types.

2. Can I get a mortgage with bad credit?

Yes, especially with government loans—but expect higher rates. A broker like Associated Mortgage can help find the right lender.

3. Does checking my credit hurt my score?

No. Checking your own credit is a soft inquiry and has no negative impact.

4. How can I quickly boost my credit score?

Paying down credit cards is one of the fastest ways. You may see results in 30–60 days, but long-term improvements take planning.

5. Why choose a mortgage broker instead of a bank?

A broker like Associated Mortgage has access to multiple lenders and understands the Utah market. They can find the best deal for your situation and help guide you through every step.

Final Wrap-Up

Buying a home in Utah—one of the most exciting real estate markets in the country—can be a dream come true. But without a strong credit score, that dream can become expensive, stressful, or even out of reach.

Start preparing early. Reduce debt. Pay bills on time. And work with a trusted mortgage broker 6–12 months before applying. Associated Mortgage offers personal service, market expertise, and access to the best loan options for your credit profile.

Improving your score isn’t just about qualifying for a loan—it’s about saving money, increasing peace of mind, and securing your financial future. If homeownership is in your plans, take the first step today: focus on your credit, reach out to Associated Mortgage, and get closer to holding the keys.

Ready to see how your credit score affects your payment?
Visit the Associated Mortgage website, try their rate calculator, or book a free consultation today. Your dream home may be closer than you think.