When you apply for a mortgage to purchase a home, your credit score will play a significant role in the interest rates affixed to your loan. While mortgage options exist for borrowers with less than a 670 credit score, those with scores higher tend to have options with more favorable rates. Here’s what to know about mortgage loans if you have a 670 credit score or higher.


Credit Scores: An Overview

Your credit score rating is calculated based on several factors including:

  • Length of credit (how long you’ve had each account)
  • Available credit (how much credit has been extended to you)
  • Total debt (credit card balances, school loans, medical debt, personal loans, auto loans, other mortgage loans)
  • Number of accounts you have open
  • Payment history (on-time, late, delinquent)
  • Types of credit accounts (installment, revolving) 


Credit scores range from 300-850, with 300 being a low credit score, and 850 being a virtually perfect credit score. Three major credit bureaus that rate your credit. They are TransUnion, Equifax, and Experian. Each bureau ranks scores in ranges, but the standard FICO range is as follows:

Poor Credit:  300-579
Fair Credit:  580-669
Good Credit: 670-739
Very Good Credit:  740-799
Excellent Credit: 800-850


Mortgage Loans for Borrowers with a 670 Credit Score

Since a 670 credit score indicates fair-to-good creditworthiness, mortgage options that may be best suited for you include:


Keep in mind that different mortgages will require different down payment amounts. For example, an FHA loan may be available to borrowers with a 670 score and only 3.5% of the purchase price as a down payment. However, you will need to pay for insurance upfront and annual mortgage insurance.


If you have a 670 credit score and wish to obtain a conventional mortgage, you also benefit from a 3% down payment requirement, but any down payment of less than 20% of the home’s price, will require you to pay for private mortgage insurance (PMI). 


How to Improve Your 670 Credit Rating

Although having a credit score of 670 puts you in the “good” range, if you want to get even better interest rates, you’ll want to work on improving your score.  For FHA, VA and USDA loans, having a 680 score gets you a slightly better deal.  For Conventional low down payment borrowers, you’ll definitely see better offerings as you move up from 680 to 700, 700 to 720 and 740 and above often offers the very best rates.  You can boost your credit score by:


  • Reduce your credit usage to less than 30% by paying more towards balances each month
  • Review your credit report and challenge any inaccuracies
  • Request a credit line increase from a credit card
  • Pay off any past-due accounts
  • Refrain from opening new credit accounts until you’ve secured your mortgage
  • Leave all accounts open, even once they are paid off


Mortgage Loans for Buyers with Good Credit in Oregon

If you have a good or excellent credit score, you will likely have multiple options available for financing a new home, condominium, or townhouse. However, even if you have a credit score lower than 670, there are also options available. If you need a mortgage loan in Oregon, Strategic Mortgage Solutions is ready to find the best options for financing. Message us today or call 541-275-1148 to learn more.