HOW YOUR CREDIT SCORE AFFECTS HOW MUCH YOU CAN AFFORD
- johnathanmcquoid
- Jan 17
- 2 min read
Most buyers don’t realize how much their credit score impacts their maximum purchase price.
Two people with the same income, same down payment, and same debts can qualify for VERY different mortgage amounts — just because of their credit score.
Here’s how lenders look at it 👇
1️⃣ What lenders actually look at
The credit score YOU see is not the same score lenders use.
They rely on your full credit report, payment history, and length of established credit.
✔️ two active accounts
✔️ at least $2,000 limits
✔️ at least 2 years history
This creates the baseline lenders use to evaluate risk.
2️⃣ Higher scores = better debt ratios
Your credit score directly affects how much of your income can be used toward housing costs.
✔️ higher score = higher allowable ratios
✔️ lower score = stricter limits
Better credit gives you more borrowing room.
3️⃣ Example: Two buyers, same income, different scores
Let’s compare two people:
**Jane** — credit score 680+
**John** — credit score 600–679
✔️ both earn $50,000
✔️ both have similar liabilities
✔️ both have proper credit history
Same profile… except the score.
4️⃣ Borrowing limits based on score
Here’s what lenders allow:
**Jane (680+)**
GDS allowed: 39%
TDS allowed: 44%
**John (600–679)**
GDS allowed: 35%
TDS allowed: 42%
Those small percentage differences drastically impact affordability.
5️⃣ How this changes real buying power
Assume heat + property taxes = $300/month.
Jane can allocate **$1,325/mo** toward a mortgage payment.
John can allocate **$1,158/mo** toward a mortgage payment.
Using the qualifying rate:
✔️ Jane qualifies for approx. **$236,000**
✔️ John qualifies for approx. **$206,000**
That’s a difference of **$29,735** — just because of credit.
💬 Final Thought
A stronger credit score doesn’t just get you better rates. It can increase your purchasing power by tens of thousands of dollars.
If you want help understanding where your score sits and how to improve it before applying, send The Frontline Mortgage Group a message anytime. 💬