Credit Score & Report

What Is Your Credit Score? What Does It Mean For Your Mortgage?

Mortgage lenders closely examine your financial history to determine whether to approve your loan application. Your Credit report is of primary concern. It details your payment history on all loans, Bankruptcy filings and other financial information. Your credit score, which uses your Credit Report to arrive at a numerical representation of your overall Creditworthiness.

Credit scores (sometimes called FICO scores after Fair Isaac & Co., the firm that created the most commonly used form) range from the 300s to about 900, with most home buyers falling in 600s and 700s.

What Are The Factors Used To Determine Your Credit Score?

• Past Delinquency: Those who have failed to make payments in the past tend to do so in the future. The more recent a delinquency, the more it counts against you; a 30 day delinquency within the past 12 months hinders your chances of getting favorable mortgage terms.
• Length of credit: The longer you've had credit, the better.
• Credit use: If you're "maxed out" or close to your credit limits, you're viewed as risky.
• Mix of credit: Someone with a combination of revolving and Installment Debt is considered less risky than one with only a secured Credit Card.
• The higher your credit score, the less risky you appear to a Lender. A good credit score will help you qualify for a mortgage loan and obtain better terms.

Why Check Your Credit Report Before Your Lender Does?

An estimated four out of five credit reports contain some kind of misinformation. You will want to clear up any errors before approaching any lender. You should also obtain copies of your credit report from all three credit reporting agencies: Equifax, Experian and Trans Union. Most likely each will differ from the other in small ways.

Tips For Cleaning Up Your Credit Report

• Look closely for any errors and correct them.
• Note late payments and credit balances; you may have to explain them to a lender.
• Compare account numbers to make sure they're yours.
• Resolve outstanding bills.
• Pay all bills on time.

You Can Get Your FREE Credit Report By Clicking Here!

Categories