How Your Credit Score Impacts Your Mortgage Rate

In today’s high-rate environment, every point of credit really counts. Nationwide 30-year fixed rates are hovering around 6–6.5%, so a small rate difference can cost you thousands over the life of a loan. Lenders use “risk-based pricing,” meaning your credit score is one of the big factors in your interest rate. Simply put, a higher FICO score signals lower risk and earns a lower rate. This matters especially for jumbo and non-QM loans, which lenders underwrite more strictly. (LendFriend serves borrowers in high-cost states – CA, TX, FL, IL, NC, VA, CO, OH, CT – where home prices often exceed conforming limits, so jumbo and alternative loans are common.)

But why does a lender care about a higher score? Because credit scores are built on your track record of managing debt responsibly. A high score tells the lender you’re less likely to default, which lowers their risk. Lower risk translates into better pricing, more loan options, and often more leniency on things like reserves and down payment requirements. In short, a strong score makes you a safer bet—and that safety is rewarded with cheaper borrowing costs.

Even a few points can move you into a better pricing tier. For example, lenders often treat credit scores of 740–760 and above as the top tier for lowest rates. If your FICO is 718–719, raising it a handful of points can push you into a lower-rate category. Conversely, dropping from 760 into the 700–739 range usually results in a noticeable rate bump. Mortgage industry data shows borrowers with 760+ credit paying around 7.24% APR, while those in the 700–759 range averaged about 7.45% — roughly a 0.20% difference for a ~60-point gap. Over a $400,000 loan, that’s roughly $165 more per month (about $59,000 extra interest over 30 years).

Credit Score Tiers & Rate Breakpoints

To secure the absolute lowest rate on any mortgage (jumbo or non-QM included), aim for a FICO in the upper 700s. LendFriend’s jumbo loan programs target 780+ for prime pricing. Below that, expect rates to climb about 0.125% for each ~40-point drop in score or expect to be charged about 0.15%-0.25% of the total loan amount in fees for each ~20 point drop.

For example - if a 780+ borrower wanted a $1,000,000 loan, they might qualify for a 6.125% rate, but someone at 740 might only qualify for 6.25%. Even someone at a 760 credit, may be charged up to $2,500 in fees to access that same 6.125% that the 780+ borrower has. These increments add up quickly. Borrowers in the 720s or low 700s often see an extra 0.25–0.375% on their rate compared to a 780-level borrower, plus possibly higher lender fees.

In practice, lenders often offset higher credit risk by charging either points or a slightly higher rate. A typical workaround is to add about 0.125% to the rate in lieu of charging a o.5% or half-point fee. In any case, 700–720 FICO borrowers should expect higher costs than 740+ borrowers. LendFriend’s guidelines mirror this: 700 is roughly the minimum score for most jumbo and non-QM programs, and anything above 750 earns the most competitive pricing. In short, boosting your score from the high 600s into the 700s (and beyond) can meaningfully reduce your mortgage rate.

What Does This Mean for You?

• 780+ FICO: Eligible for the lowest rates (this is the goal for best pricing).

• 760–779: Still excellent; rates within a few basis points of the best.

• 740–759: Good. Borrowers here get competitive rates, but expect up to ~0.125–0.25% higher than the 780 tier.

• 720–739: Fair to good. Rates climb another 0.125–0.25% in this bracket, plus likely higher fees/points.

• 700–719: The minimum viable credit score for most jumbo/non-QM loans. Rates can be 0.25–0.375% above the top tier. If your credit score is below a 700, you're priority to be to increase your score to qualify for a loan program. LendFriend can always help find a path to quickly increase your score by 40-60 pts.

Remember: payment history is the single biggest factor (35% of FICO). Even if you’re already at 740+, always pay on time to avoid setbacks. A few points lost to a late payment or high credit card balance could cost hundreds of dollars a month on a jumbo loan.

Flexible Loan Programs for Unique Borrowers

LendFriend offers a suite of loan programs beyond standard mortgages, each with its own niche – and credit requirements that reflect that niche. Here are some of our key products:

• Jumbo Loans – Mortgages above conforming limits. We connect borrowers to dozens of jumbo lenders, including options with just 10% down. Our jumbo programs accommodate non-traditional borrowers: self-employed borrowers can qualify with bank statements, and we even offer asset-based ARMs for high-net-worth clients. Typically, 700+ FICO is required – 780+ helps secure the lowest rates.

• Self-Employed Mortgages – Designed for freelancers, business owners, and content creators. These “bank-statement” and “1099” mortgages let you qualify on cash flow instead of tax returns. If you earn 100% on contractor income or have seasonal 1099 wages, this program uses your actual deposit history to verify income. You still need good credit (we generally look for 700+), but these loans erase traditional paperwork barriers.

• Asset Depletion Mortgages – Ideal for high-asset buyers with little qualifying income. Retirees and investors often fall into this camp: you may have a half-million in brokerage or retirement funds but low annual W-2 income. Asset depletion loans convert assets into qualifying income. This is perfect for luxury buyers: we’ve helped clients use six-figure portfolios to qualify for seven-figure homes, with 700+ FICO as the baseline.

• Crypto-Backed Mortgages – Use cryptocurrency as collateral to buy your home. Instead of selling your Bitcoin/Ethereum (and incurring capital gains), LendFriend’s crypto programs let you “lend” those holdings to qualify. These loans require no traditional income proof. If you have a six-figure crypto balance and a 700+ score, you may qualify for financing – even if you can’t document income on paper.

• VA Jumbo Loans – Jumbo financing combined with VA benefits. Veterans and service members can typically borrow far above standard VA limits in high-cost areas. While VA loans normally require no down payment, jumbo VA usually asks for 10–20% down; still, interest rates can be very competitive. Most VA jumbo lenders want 620+ FICO, but a stronger score in the 780s will ensure the lowest pricing.

• RSU Mortgages – For tech employees and startup insiders. If you get paid in stock (RSUs or stock grants) rather than cash, you might struggle to qualify with your low W-2. LendFriend lets you count vested RSUs as income. We walk lenders through your vesting schedule or 1099 share sales so that your total compensation is properly reflected. Many high-tech professionals use these loans to unlock homebuying power without selling a single share.

• DSCR Loans – Debt-Service Coverage Ratio loans for real estate investors. Here, your personal credit and income don’t matter; instead, qualification is based on the property’s rental income. If the net rent covers the mortgage, you may qualify. Even though your income doesn't affect the mortgage qualificaiton, your credit score does. You still want a 780+ score to qualify for the lowest pricing and best terms

For comparison, conventional mortgages and standard VA loans exist, but they often have stricter limits on both loan size and borrower profile. Conventional 30-year fixed loans typically need 740+ scores to snag the best rate, and banks rarely consider exotic income sources. VA loans (non-jumbo) usually require lower scores (around 620+), but you must fit the VA program rules and loan size caps. LendFriend specializes in the cases banks turn away – multistate business owners, gig workers, crypto investors, RSU-heavy techies, etc.

Tips to Boost Your Credit Quickly

If your score isn’t in the ideal range yet, there are concrete steps to improve it:

• Dispute errors: Order your credit report from all three bureaus (free at AnnualCreditReport.com) and check for mistakes. Correcting even a single wrong “late payment” can raise your score fairly quickly.

• Pay down revolving balances: Credit utilization has a big impact. Aim to keep your total credit card usage in the single digits or at most under 30% of each limit. Paying off a few thousand from your cards can result in an immediate bump when the issuers report.

• Timely payments: Never miss a payment. On-time payment history is 35% of your FICO score. Even one 30-day late can cost you dozens of points and big rate jumps.

• Authorized user: If you have a family member with a high-limit, well-managed credit card, ask to be added as an authorized user. You’ll “inherit” part of their positive history, which can boost your score almost immediately.

• Avoid new hard inquiries: Each credit application triggers a hard inquiry that can ding your score. Also avoid closing old accounts: the length of your credit history matters, so keeping old cards open (even at $0 balance) helps.

If you follow these steps, you can often add dozens of points within a few months. And remember: LendFriend will work with you on a credit-improvement plan if you need it. If your score isn’t there yet, let our loan officers guide you on the fastest path up.

 Schedule a call with me today or get in touch with me by completing this quick form to learn your current credit score and see what rate you might qualify for. Even if you want to take your 740 credit score to a 780, LendFriend will chart a clear path forward. We’ll compare rates, explain any fees, and help boost your profile so you can lock in the best possible jumbo or non-QM mortgage for your situation.