Did you know that if you had your credit scores pulled by a mortgage company, a credit card company, and a car company all on the same day, you could end up with 3 different results? This is because different types of creditors utilize different score models or different equations to come up with credit scores. As a result, this may create some confusion amongst consumers. The free online score models typically give good advice and are a great way to monitor your credit. However, don’t expect the scores to be the same.
A good credit score can increase your eligibility for the best loan terms
Most score models measure credit scores on a scale of 300-850 (850 being the best). In the mortgage industry, the majority of credit scores are typically in the 560-800 range. It is very uncommon to have a score below 480 or above 825. Most homebuyers who obtain a credit score in the 740- 760 range and above, are usually eligible for the best loan terms.
Most lenders look at more than your credit score
However, your credit score is not the only thing lenders look at to determine if you are eligible for a mortgage. Lenders will also look at your payment history and for things like collections, judgments, late payments, bankruptcies, foreclosures, repossessions, charge offs, etc. For example, it is possible to have a 700 credit score with a previous derogatory credit event that could potentially disqualify you from a mortgage because of underwriting guidelines based on product type.
Wondering if you have good credit?
If you have any questions about credit scores, how to pull them, or what they are please feel free to reach out! We are here to guide you through your homebuying process.
Topics: Credit Score, good credit, good credit score, What is a good credit score
