For mortgage purposes: 740+ is excellent (best rates), 700-739 is good (competitive rates), 660-699 is fair (most programs, moderate premium), 620-659 is acceptable (limited programs, higher rates), and below 620 is challenging (FHA down to 580).
The good threshold is really 700+, where you get access to all programs and reasonable rates.
Credit Score Tiers for Mortgages
| Score Range | Rating | Loan Access | Rate Impact |
|---|---|---|---|
| 740+ | Excellent | All programs, best rates | Lowest tier |
| 700-739 | Good | All programs | +0.125-0.25% |
| 660-699 | Fair | Most programs | +0.25-0.5% |
| 620-659 | Acceptable | Limited programs | +0.5-1.0% |
| Below 620 | Challenging | FHA (580+), limited options | +1.0%+ |
What Each Tier Means for Your Rate
On a $350,000 loan, the difference between a 700 score and a 740 score is about 0.125-0.25% on your rate. That translates to approximately $25-50 per month. The real jump comes between 660 and 700, where the rate difference can be 0.25-0.5% or more.
The Real Dollar Impact
Score difference matters. A 0.5% rate difference on a $350K loan costs about $105/month or $37,800 over 30 years. Going from 660 to 740 can save you 0.5-0.75% on your rate, which is a substantial savings.
How to Know Your Score
You can check your credit score for free through many sources: credit card companies often provide free scores, annualcreditreport.com gives you free reports, and many lenders offer a free credit review. For mortgage purposes, lenders use your middle score across all three bureaus (Equifax, Experian, TransUnion).
When to Buy vs Wait to Improve
If you are at 700+, you can buy now. The rate difference between 700 and 740 is meaningful but not a dealbreaker. If you are below 660, I recommend spending 60-90 days improving your score before applying. The savings in rate will more than justify the wait.
