Since 2007, when Freddie Mac and Fannie Mae introduced “risk-based pricing,” consumer credit scores have played an increasingly pivotal role in the mortgage application process. “Fannie Mae and Freddie Mac looked at credit scores and loan performance and realized that borrowers with lower credit scores are far more likely to default on their loan than borrowers with higher scores,” says Douglas Benner, a senior loan officer with Embrace Home Loans in Rockville, Md.

As a result, credit score requirements are now stricter. Consumers need high scores to qualify for the lowest mortgage rates, says Gibran Nicholas, chairman of The CMPS Institute, an organization in Ann Arbor, Mich. that trains and certifies mortgage bankers and brokers.