As mortgage rates rise sharply and mortgage refinancing volumes plunge, American mortgage borrowers’ credit scores are declining a bit. However, most borrowers who qualify for mortgages have near-perfect credit scores.
The typical credit score for mortgage borrowers dipped to 776 in the first quarter of 2022, down from 778 in the fourth quarter and just off the first quarter’s record high of 788, the Federal Reserve Bank of New York said in its latest quarterly report. During the era of loose lending that led to the Great Recession, by contrast, the median credit score of mortgage borrowers fell to as low as 707.
Meanwhile, only a quarter of borrowers who landed home loans during the winter months had credit scores of less than 723. Just 10 percent had credit scores below 674, according to the New York Fed’s data.
