How Many Points Will My Credit Score Go Down to Get Approved for a Home Loan

Title: How Many Points Will My Credit Score Go Down to Get Approved for a Home Loan?


Obtaining a home loan is an important milestone for many individuals and families looking to purchase a property. One crucial factor that lenders consider during the loan application process is the applicant’s credit score. While there is no definitive answer to how many points a credit score may decrease to secure a home loan, this article aims to provide a comprehensive understanding of the factors that influence credit score changes and answer some frequently asked questions related to this topic.

Factors Influencing Credit Score Changes:

1. Credit Utilization Ratio:
– One of the significant factors that affect your credit score is your credit utilization ratio. This ratio represents the amount of credit you are currently utilizing compared to your available credit. As a general rule, it is recommended to maintain a credit utilization below 30% to avoid a negative impact on your credit score. Higher utilization may result in a decrease in credit score points.

2. Payment History:
– Timely payments play a crucial role in maintaining a good credit score. Late payments or missed payments can significantly impact your credit score. A single late payment can cause a drop of around 60-110 points, depending on your overall credit history.

3. Credit Age:
– The length of your credit history is an essential factor for lenders when assessing your creditworthiness. A shorter credit history may result in a lower credit score. However, opening new credit accounts may temporarily lower your score as it reduces the average age of your credit accounts.

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4. Credit Mix:
– Having a mix of different types of credit (e.g., credit cards, mortgages, car loans) can positively impact your credit score. Lenders prefer borrowers who can handle various types of credit responsibly.


Q1. How many points will my credit score go down if I apply for a home loan?
– Applying for a home loan may result in a minor decrease in your credit score. Typically, a single credit inquiry may lead to a decrease of 5-10 points. However, if you apply for multiple loans within a short period, it may create a negative impression and cause a more substantial credit score drop.

Q2. Will my credit score impact the loan interest rate I receive?
– Yes, your credit score plays a significant role in determining the loan interest rate you are offered. Lenders generally offer better interest rates to borrowers with higher credit scores as they are considered less risky.

Q3. Can I still get approved for a home loan with a low credit score?
– While a low credit score may make it more challenging to secure a home loan, it is not entirely impossible. Some lenders specialize in providing loans to individuals with lower credit scores. However, these loans may come with higher interest rates or other conditions.

Q4. How long does it take to improve my credit score?
– The time required to improve your credit score depends on various factors, including your current credit situation and the steps you take to improve it. Generally, it takes several months of responsible credit management to see a significant improvement in your score.

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Q5. Should I pay off all my debts before applying for a home loan?
– Paying off your debts can positively impact your credit score and improve your chances of getting approved for a home loan. However, it is essential to consider other financial factors, such as your down payment and closing costs, before using all your funds to pay off debts.


While it is challenging to determine precisely how many points your credit score will drop to get approved for a home loan, it is crucial to understand the factors that influence credit score changes. Maintaining a good credit score through responsible credit management is essential not only for securing a home loan but also for obtaining favorable interest rates and financial opportunities in the future.