February 16th, 2018 6:11 PM by Dana Bain
Consumers thinking about getting a mortgage
should know where they stand. Here is what you might not know about your credit
score when it comes to applying for a mortgage.
The truth is not all credit reports are
created equal. Many of the consumer credit reporting services that are
available in the market place today such as Credit Karma do not give you the
same type of data that a mortgage credit report does. The granddaddy credit
report bar none is a financial services credit report. A financial services credit
report is the most accurate type of credit report because it provides a credit
score from each bureau.
Most of the consumer credit reports available
in the market place only provide one score or no scores or a combination of
multiple reports with inconsistent information as it pertains to accurateness.
For example, if your credit score is 700 from
Credit Karma then when you go apply for a mortgage, your credit score is 650.
This disparity might be because the credit report that the mortgage provider
obtains is all 3 credit scores and they use the middle of the score.
The other misconception in the marketplace is
that applying for a mortgage makes your score tank. That is just not true.
The federal government encourages you to shop for a mortgage and does not
penalize you from a credit reporting standpoint if you’re having mortgage
lenders pull your credit report.
Consumers can get into trouble when they are
applying for a mortgage and diverse types of credit entities at the same time
e.g. a mortgage inquiry, a cell phone inquiry and a cable inquiry.
Another reason that there could be a disparity
in your credit score versus the credit score that the lender obtains is that
each creditor you have reports to the different bureaus at separate times of
the month and there is not an accurate way to pin point in time when the
optimal time to pull a copy of your credit report is.
A credit report is an accurate reporting of your
credit 30 days ago. Put another way, you might see some debts on your credit
report that are already paid off based on when your creditor reports your
activity to the bureaus. If you need to get your credit score up most mortgage
companies can do what’s called a rapid score to show that you’ve paid down a
credit card for example to get your credit score up a couple of notches to
change your mortgage loan program or your down payment or get you into a more
affordable mortgage loan. Let the mortgage company help with your financial
situation including your credit.
Give us a call at 978-422-2311 or email firstname.lastname@example.org
Licensed by the State of New Hampshire Banking Department- License Number 5430-MBR Premiere Mortgage Services Inc. NMLS #1498 is a licensed broker and not a lender. We arrange but do not make loans.