A credit score is a rating based on how one manages prior loans. Note that the credit rating is determined by both the good and the bad information, which are recorded permanently and points accumulated to create a numerical score used by lenders to determine how credit worthy a borrower is. This is to say that if you have had previous loans and serviced them faithfully, your credit rating will reflect positively and so will the credit score.
On the other hand, if your previous loans have been marred by late and missed payments and your creditors have had to chase you all over for payments, then your rating and subsequent score will reflect this and it will be more or less like a warning to lenders that you a bad borrower. Thus, your potential mortgage lender will look at your credit score to generate an overview of whether you are a good borrower or a bad one.
If you have a favorable credit score, your mortgage lender will assume that since you have been faithful with your previous finances, then you probably are trustworthy and this will make them more willing to finance your mortgage. On the other hand, a poor credit score is a reflection of failure to repay loans and will be a warning to mortgage lenders that you are most likely a very difficult client to deal with and chances of them recovering their money back from you in the future are quite slim.
Thus, the first impact of the credit score will be how willing the mortgage lender will be to finance your home. Note however that this is not the only consideration they will take into account. Say you can pay a deposit, for example if you are only seeking to get at least 25% of the total value of the property, then even with a poor credit score you are highly likely to get financed. On the other hand, if you need a 95% mortgage financing, your credit score ought to be very good indeed.
The other effect of a credit score is the actual rate of interest you will be offered for the mortgage. Say for example you have got an offer, only the mortgage applicants with the best credit scores and those high down payments will get the best interest rates that the lender could offer. However, those with low deposits complimented by worse credit scores will have a very high interest rate. Thus, your credit score could end up costing you a lot with a mortgage.
This is the reason why before you apply for a mortgage, you might want to check your credit score and ensure everything is fine. Ensure there are no errors and equally vital there is no positive information missing like paid off loans.