For many consumers, checking their credit score can yield a variety of results. With instant access to credit scores now available through most major credit cards, banks, and other sites, it has never been easier to see where you stand. Credit scores can vary from one service to the next and depending on which credit bureau is providing the information. Additionally as the balances on your credit cards change, the score can go up or down. It can be confusing to see a different score depending on where and when you look. Click here for tips on getting the best score!
This variance in credit scores can be frustrating for consumers who feel confident that they understand where their score is before applying for credit. For example, there can be a huge difference between what your credit card company says your score is and what your mortgage company gets for a score. Almost all lenders and banks use your FICO (Fair Isaac Corp.) score when evaluating credit risk and depend on the three main credit agencies (Experian, TransUnion, and Equifax) to calculate that score. These agencies provide us with the most accurate determination of your score, which helps us discern creditworthiness. The highest score in most industry models is 850. To get the absolute best rates, in general, you need a score of 740. Typically lenders can lend with scores as low as 580 for FHA and 620 for conventional and other programs.
Understanding your credit score and your credit report are vital when you are applying for a new loan. That is why it is imperative to work with a Mortgage Planner who will take the time to review your score, answer your questions about the scores that you may have seen, and help you understand the process.
When you apply for a mortgage loan with me, I will be happy to review your credit report with you. Together, we can decide if your credit will impact your ability to qualify for a mortgage loan or your lowest interest rate so that you can make the best decision about your new home. If you are buying in the future, you may be able to take steps now to improve your score and get a better rate or terms!