FICO scores (Fair, Isaac and Company Scores) affect your mortgage in that they determine what type of loan a borrower can qualify for. For example, the higher the credit score the better the loan. In turn, the borrower will receive a better interest rate, with the probability of fixed amortization. These guidelines set by the lender (the bank) anticipate the likelihood of repayment. If a borrower has a lower FICO score, the interest rate can be much higher, and the quality of the loan may not be as good. Borrowers with lower credit scores are seen as a much higher risk than those with better credit, thus, the higher interest rate.

FICO scores are usually the biggest determining factors, if not the only guidelines in place to determine which loans borrowers can qualify for. Moreover, it is a good idea to check your credit report for errors. There may be simple errors that can increase your credit score, and in turn get you a better rate. This is why managing your credit responsibly is very important.