Not knowing importance of credit score
While most consumers know it's important to have a high credit score, not everyone understands how costly a low score can be.
"All mortgage lending is done with a tier of interest rates and terms based on consumer credit scores," Harrison says.
Borrowers with credit scores of 740 and above tend to get the lowest rates and fees, saving potentially thousands of dollars. Mortgage-related fees usually are a little higher for credit scores from 720 to 739, and they go up for every 20-point downward increment in credit scores. Interest rates can go up, too.
Consumers should learn about credit scores the minute they start working, Harrison says.
Even after a mortgage approval, consumers must avoid applying for new credit or taking on new debt, Adamo says, because a second credit check is often required before settlement.