Origination fees usually represent the cost of processing a loan and setting up an agreement. This fee covers the cost that the lender incurs of underwriting a loan and also the cost associated with the verification of documents (including the credit score). Even though it may sound unfair, many institutions will calculate the origination fee based on the creditworthiness of the individual. In reality, the fee might not be too high but is another point that proves that having a proper credit score will save you a lot of money down the road. In 2019 the average origination fee is between 1% and 5%.