Here's What Happens When You Apply for a Mortgage With a Credit Score of 700

Experian says a credit score of 700 is considered good. And seeing as how it takes a minimum credit score of 620 to qualify for a conventional mortgage, if you have a 700 credit score, you're in pretty good shape to get approved for a home loan.

But while a mortgage lender may have no problem approving your application with a credit score of 700, you may not end up getting the best rate on your mortgage with that score. On the other hand, raising it could work to your benefit and help you snag a lower mortgage rate.

Good, but not great

A credit score of 700 is quite respectable. It's an indication that you generally pay your bills on time and manage your existing debts well.

But a credit score of 700 also isn't great. Rather, your credit score needs to reach the 740 mark to be considered very good, according to Experian. And it needs to reach 800 to be considered exceptional.

A higher credit score isn't just a matter of pride, though. In the context of getting a mortgage, it could make your home loan far more affordable.

The higher your credit score, the lower the interest rate you're likely to snag on a mortgage. And the lower that rate is, the lower your monthly payments will be.

Meanwhile, let's say you're applying for a $300,000 mortgage. With a credit score of 700, FICO says you're likely to snag a 6.974% interest rate on a 30-year loan today, bringing your monthly payments to $1,991 apiece.

But now let's imagine your credit score is a 780. FICO says that with that score, you'd be looking at a mortgage rate of 6.752% for that same 30-year, $300,000 loan. And the resulting monthly payment you'd be looking at is $1,946.

That's a monthly savings of $45, and an annual savings of $540. And over the course of a 30-year mortgage, it's a total savings of $16,200.

How to boost your credit score quickly

With a credit score of 700, you are pretty likely to get approved for a mortgage provided you don't have too much debt and you have a steady job with a high enough salary to cover the loan you're looking to sign. But a higher score might result in savings, so it pays to see if you can boost your credit score before you submit your mortgage application.

The factor that carries more weight than any other when calculating your credit score is your payment history, which speaks to how timely you are with bills. But as you might imagine, it can take time to improve your payment history.

So while it's a good thing to pay your incoming bills on time, if you want faster results, paying off a chunk of existing credit card debt may be worth focusing on. Doing so could lower your credit utilization ratio quite a lot, which is another key factor in calculating your score.

You can also potentially raise your credit score quickly by reviewing your credit report for errors. Spotting and correcting a mistake might leave you with a higher score in short order. And that could spell the difference between a higher mortgage rate and a lower one.