You’re More Than a Credit Score: What Factors Matter to Your Mortgage Lender?

Your credit plays a big role in your mortgage application — but it’s not just the score that matters.

While mortgage lenders certainly consider your score when evaluating your application and determining your interest rate, they also look at other aspects of your credit, too. This often includes your history with credit, the number of credit lines you have and your overall utilization of those lines.

Are you considering buying a home and want to be in a prime spot for approval? Already applying for a loan and hitting a wall? Here’s what you need to know about credit’s role in the process.


A good credit score is only the first step to getting a mortgage loan. Lenders will also heavily consider your credit history, your credit utilization rate and the number of credit lines you have to your name.

Let’s look at each of those in more depth.

Credit history/length

This is how long you’ve had credit to your name. Generally, mortgage lenders want to see at least one full year with each line of credit you have.

Number of credit lines

They’ll also look at the number of credit lines you have. Most lenders prefer you have multiple lines — not just one — and good mix of different types of credit (cards, loans, etc.)  Most mortgage programs require at least 3 credit lines currently active.

Credit utilization rate

Lenders will also compare your outstanding balances on your credit accounts (what you owe) to the limits on those cards/accounts (the max you’re allowed to spend) in order to calculate your credit utilization rate.

The lower that utilization rate is, the better, as it indicates:

  1. You’re responsible with your credit.
  2. You honor your repayment obligations.
  3. You won’t have any high monthly debt payments to contend with once you get your mortgage.

Credit utilization is measured as the percentage of your credit capacity that you currently use.

In general, having credit utilization under 10% puts you on a good path, but being above 30% puts you on a high risk category.  You may need to pay off some debt before moving forward with a mortgage loan.

Debt-to-Income ratio

Debt-to-income ratio (also known as DTI) is the result of dividing your monthly debt payments by your monthly gross income. The ratio is typically measured as a percentage

Mortgage lenders use it to determine how well you manage monthly debts and obligations. It’s taken as the best indication of whether you will be able to afford to repay a mortgage loan.

Lenders are typically looking at a debt-to-income ratio (after mortgage) under 50% (the exact number depends on your scenario and the loan program).


Your credit plays a vital role in the homebuying process — but it’s not just the score that matters. Check out our tips for improving your credit in each of these four areas.

Need more guidance on priming your finances for that home purchase? Get in touch with a SnapFi loan expert today. We’re here to help.


There are both short term and long term strategies to get your credit up and your financial scenario in top form before you apply for a mortgage loan.

Check out these hacks to help you boost your credit quickly, but don’t forget to develop long-term habits to keep your credit report in top shape.


You are entitled to a free annual Credit Report OR you can work with a mortgage lender like SnapFi to get a free credit report and credit improvement plan from a licensed mortgage advisor. This is the best way to get an expert to help you.


When you feel ready, the best way to determine if your credit is in the right place and can buy a home is to run a quick pre-qualification with a reputable mortgage company.  It only takes 5 mins to provide some basic info and get a mortgage advisor to look into your profile.

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