November 21, 2017
 
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How Your Credit Score Opens the Door to Your New Home

An educated buyer operates more effectively in the marketplace, and a key marketplace arena is real estate. Potential lenders will analyze your risk factor as a borrower, and your credit score is one of the key data points they will be looking at.

Your credit report shows how you handle the credit you have already received. This scoring affects both whether or not you qualify for a loan and the rate you will be offered.  The higher the credit score, the better your potential terms and the lower your interest rate.  Certain history patterns or characteristics may negatively affect your risk factor. In the event that a lender denies a borrower on the basis of credit score, the specific reason must be stated.

Reviewing Your Credit Score:

There are 3 separate companies that rate your credit history: Experian, Equifax and TransUnion.  Federal law requires that you have access to a free credit report from each of these reporting agencies every 12 months.

Credit scoring is a process that employs statistical characteristics in the evaluation and generation of your credit score. Some of the key factors are payments, debts, the amount of credit held, and charge-offs (when a creditor indicates that a debt is not likely to be collected). Federal regulations prohibit the use of certain demographical data in the analysis of your credit score, such as race, religion, sex and marital status.

After pulling your reports, you need to carefully review them and make sure there are no errors. Should you find a discrepancy, report it to the agency to achieve resolution. Clearing your report of errors will likely improve your credit score and help position you for a lower interest rate.

Come prepared for your lending consultation by reviewing your credit, fixing any errors and setting the stage for your own success! This shows the lender that you are ready and responsible to take the next step towards home ownership!

 

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