As mortgage lenders attempt to determine whether a customer will repay a requested loan, they obviously look at how a customer has repaid previous and current loans.
In determining a customers willingness to repay loans, credit scores are obtained from a tri-merged credit report. These 3 scores are critical. The three major credit reporting agencies are: Transunion, Equifax and Experian.
Scores range from 300 to 850. 850, of course, being best. Credit scores are calculated based factors that a particular lender finds important. This is to say that credit scores my be different, depending on the industry or business that is requesting the report. Mortgage lenders use a different scoring system than
automobile lenders and often consumer credit reports offered for sale will have a different scoring system than those used for lending. Hence, the information on the reports may be the same but, the scores will probably be different. The important factors making up your scores are:
A.) Making loans payments on time.
B.) Maintaining balances on revolving credit (credit cards) below 50% of
your credit limit.
C.) Excessive shopping. Too many inquiries on your report in a short period
Consumers can check their report at: ANNUALCREDITREPORT.COM or, call
My advice would be that if you anticipate borrowing in the near future, consult a local Mortgage, Banking or Lending professional for guidance.
Tony M. Howard is a mortgage broker at Advanced Mortgage Concepts located at 1031 N. Washington Street, Lansing, MI 48906. His phone number is 517-484-6610.