A borrower’s credit rating plays a pivotal role in his or her ability to secure an attractive loan. In addition to overall approval, the rate and duration of the loan can be affected by the borrower’s credit history. Perhaps, anticipating a big ticket purchase in the near future, you decided to take advantage of your right to ask for a free credit report. It’s important to note, that the numbers you see in those documents probably won’t mirror what your mortgage company sees.
The reason is that mortgage lenders use what is called a Trimerge Credit Report. It’s pretty much what it sounds like – a merging of the scores of the 3 major credit bureaus: Equifax, Experian and TransUnion. Lenders will generally use the middle score of the three for their actual credit score. If only two bureaus are available, the lower score is used.
It’s important to remember, it’s the middle score, not the average score of the 3 agencies. So if 2 of the 3 bureaus are in close agreement and one is an outlier, your mortgage score is likely to reflect the consensus. Remember too, that each bureau has its own criteria and scoring model, so it’s reasonable to expect a wide range of scores.
What is your best solution to this? Go ahead and get the free credit scores. Review the reports carefully. Make note of any problem areas and work proactively to resolve those issues. Regardless of your situation, the better your scores are, the greater your prospects for success.
Sanford’s Team Move office can provide even more specifics about the best ways to get a mortgage loan that will work for you. Call 919-777-0114 for assistance and answers to your questions.