How to Understand Your Credit Score: Raleigh, NC Edition

Your credit score is more than just a number—it’s a snapshot of your financial health and a key factor that lenders use to assess your risk. Whether you’re applying for a mortgage in Raleigh or exploring homeownership in the Triangle, your credit plays a major role in the rates and terms you’ll qualify for. This guide dives deep into what affects your score, how you compare to peers in Raleigh, and how to improve, and how Certified Home Loans is here to support you.

📍 Credit Scores: What’s the Range?

Most credit scoring models, like FICO and Vantage Score, use the 300–850 range:

• 300–579: Poor
• 580–669: Fair
• 670–739: Good
• 740–799: Very Good
• 800–850: Exceptional

A “good” FICO score is typically 670–739, and “very good” begins at 740.

VantageScore vs. FICO Score

VantageScore and FICO Score are two different credit scoring models, and while both range from 300 to 850, they use slightly different methods to calculate your score. FICO is more widely used by mortgage lenders and places greater emphasis on credit history length and payment history. VantageScore, on the other hand, may weigh factors like recent credit behavior or trends more heavily and can generate a score with less credit history, sometimes after just one month of activity. Because of these differences, your VantageScore may not match your FICO Score, which is why it’s important to know which score a lender will use when applying for a mortgage.

How Do Raleigh Residents Compare?

Good news—Raleigh’s average FICO score is among the highest in the nation:

• 2019 average: 712
• 2024 average: 727 (+15 points)

This strong average reflects solid financial health across our community, boosting the competitiveness of borrowers here.

What Makes Up Your Credit Score?

FICO uses five primary factors. Here’s how each weighs:

How Your Credit Score Affects Mortgages

Minimum credit requirements in Raleigh:

• Conventional Loans: Typically require 620+
• FHA Loans: May go lower, but higher scores (700–740+) earn better rates

Why it matters:

• A higher score qualifies you for lower interest rates, saving tens of thousands over a loan term.
• Strong scores also improve your approval odds and may help you avoid costly mortgage insurance (PMI).

How to Raise Your Credit Score: 7 Proven Strategies

1. Automate On-Time Payments
   Paying timely every month drives 35% of your score. One 30-day late payment can drop you significantly.
2. Reduce Credit Utilization
   Keep revolving balances below 30%, or ideally under 10%. If you’re over 30%, focus on paying those down first.
3. Maintain Older Accounts
   Keeping old credit lines open strengthens your score’s age component (15%).
4. Limit Hard Inquiries
   Only apply for new credit when needed—each inquiry can knock off a few points temporarily.
5. Diversify Your Credit
   A balanced mix of revolving and installment credit types adds up to 10% of your score.
6. Regularly Check for Errors
   Dispute inaccurate late payments, collections, or outdated information. Free reports are available annually via AnnualCreditReport.com
7. Boost Credit Volume Strategically
   A raise in your credit limit can reduce utilization, but avoid inflating your balances.

What’s New in 2025: BNPL Reporting

Buy Now, Pay Later (BNPL) accounts—offered by services like Affirm, Klarna, and Afterpay—allow consumers to split purchases into smaller, interest-free payments. While BNPL can be a convenient short-term financing option, it’s important to understand how these accounts may impact your credit. As of 2025, major credit bureaus and FICO have begun incorporating BNPL payment history into credit scoring models. This means that on-time BNPL payments can help build a positive credit history, especially for younger or credit-thin borrowers. However, missed payments, overuse of BNPL services, or multiple open BNPL accounts can negatively affect your score, similar to traditional credit cards. If you’re considering applying for a mortgage, it’s smart to use BNPL cautiously and be aware of how these accounts could influence your overall credit profile.

Starting this fall, Buy Now, Pay Later (BNPL) loans—such as Affirm, Klarna, and PayPal—will begin reporting to FICO. This development may impact users in different ways:

• On-time BNPL payments could help your score, especially if you’re building credit.
• Missed BNPL payments could harm your score. Experts caution against opening multiple BNPL lines at once.

The shift offers both opportunity and risk—approach it with caution.

Why Your Credit Score Matters in Raleigh

• Interest Rates: A higher score can reduce your mortgage rate by 0.5–1%, saving thousands annually.
• Housing Market Edge: Raleigh’s market remains fast-paced; a strong score can make your offer more attractive.
• Loan Access: Better scores make FHA, VA, USDA, and other loan options more accessible with favorable terms.

According to Raleigh housing trend data, homes under $400k move swiftly, and securing strong financing support helps you compete.

Step-by-Step Credit Improvement Path

1. Check Your Three Credit Reports (Experian, Equifax, TransUnion) for errors.
2. Set up Autopay for all credit obligations.
3. Pay down balances, starting with cards at >30% utilization.
4. Leave older accounts open, even if unused.
5. Avoid new credit applications unless necessary.
6. Add different credit types over time (e.g., installment if you just have credit cards).
7. Plan for BNPL reporting—use responsibly or avoid if unsure.

How Certified Home Loans Helps

At Certified Home Loans—a trusted Raleigh mortgage adviser and lender—we:

• Evaluate your current credit profile, including all bureau reports
• Recommend a custom credit-enhancement plan to help you reach ideal scores
• Set target score thresholds for different mortgage programs (Conventional, FHA, VA, Jumbo)
• Assist you in tracking progress, refi readiness, and pre-approvals

Our goal: get your credit and application prepared so you secure the best loan terms possible.

Take Control of Your Credit Today

You don’t have to wait to build excellent credit. Whether you’re preparing to buy in Raleigh or refinance a current home, the path is clear:

1. Assess your status: Order free credit reports
2. Take action: Make payments on time, reduce balances, and avoid inquiries
3. Stay informed: Monitor and dispute errors
4. Stay strategic: Use BNPL responsibly once it starts influencing your score

With a local mortgage partner like Certified Home Loans, you gain a team committed to improving your credit, delivering tailored loan options, and supporting your path to homeownership in the Triangle.

Ready to Take the Next Step?

If you’re thinking about buying a home, building a new one, or refinancing your current mortgage, Certified Home Loans in Raleigh, NC, is here to guide you every step of the way.

Our Raleigh Mortgage Team will take the time to review your credit score, full financial picture, and homeownership goals to design a loan strategy tailored to your needs. Whether you’re aiming to improve your credit, explore better interest rate options, or find out what loan programs you qualify for in today’s market, we’re here to help.

👉 Schedule a free consultation today and let us help you unlock the best mortgage options in Raleigh, Cary, Durham, and the entire Triangle area. Your path to confident homeownership starts with the right advice—let’s build your strategy together.