Credit Score

Updated 2026-05-17

A credit score is a numerical expression representing an individual's creditworthiness, based on an analysis of their credit files. Lenders use credit scores to assess the likelihood that a borrower will repay a loan. Higher credit scores generally indicate lower risk to lenders and can result in more favorable loan terms, including lower interest rates.

Factors Influencing Credit Scores

Credit scores are typically calculated using information from credit reports, which include:

• Payment History: Whether bills are paid on time. This is the most significant factor.
• Amounts Owed: The total amount of debt and the proportion of available credit being used (credit utilization).
• Length of Credit History: How long credit accounts have been open.
• New Credit: Recent applications for credit and newly opened accounts.
• Credit Mix: The variety of credit accounts (e.g., credit cards, installment loans, mortgages).

Importance in Mortgage Lending

For mortgage loans, including refinances, a strong credit score is a critical underwriting factor. Most lenders require a minimum credit score for loan approval. For example, for a Rate and Term Refinance, many lenders look for a credit score of at least 620. A higher score can significantly improve a borrower's chances of qualifying for the best available interest rates and loan terms.