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Fico information, commerce city
Low credit scores are deemed greater risk for lenders since the likelihood for defaulting on the loan increases.  As such, lower FICO scores translate into higher interest rates.  Mortgage lenders will group credit scores in a range, usually in 20 or 40 point increments, with interest rates progressively getting better for each higher interval.  For example, a borrower with a middle credit score between 660 - 680 will have a higher interest rate (presuming all other variables being equal) compared to one with a 680 - 700 score.  Typically, when a borrower has a 750+ credit, they will be able to secure the best possible rate, assuming their income, assets, collateral and down payment are acceptable.
 
For qualifying, underwriters use the middle credit score pulled from the three bureaus versus an average of the three.  For instance, a borrower with scores of 702, 717 and 749 would have a 717 FICO compared to an average score of 722.  If there is more than one borrower on the loan, the lender will use the lowest middle score of all borrowers versus the middle score of the primary wage earner, like many lenders used to do.  Often times, a husband and wife ... more

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