You Don't Need A 720 Credit Score To Get A Mortgage

Written by Posted On Wednesday, 11 May 2016 10:42

If you’re considering buying a home, your credit score is really important. Banks and lenders will use your credit score to decide how worthy of credit you actually are. But it doesn’t need to be nearly as high a score as people often assume. Although this does affect mortgage rates, and if it’s really low you actually might not be eligible, however, you don’t need a 720 credit score to qualify.

 

What Exactly Is A Credit Report?

Your credit report is a type of record that explains in detail the kinds of credit you regularly use, for how long, and how often you pay your bills on time. On the flip side, it also explains in detail if and how many payments you’ve been late on, missed entirely and if you have any accounts in collection. Basically a history of all the credit you’ve used and even takes a note of if you’ve been looking for any new places to get credit. Apart from that, your credit report will have information on where you currently live, and if you’ve been sued, or if you have filed for bankruptcy.

 

Where Can I Get My Credit Report?

You can always try going to the big three credit bureaus or you can visit our partner by clicking Check your credit scores!720 credit score

They have files on millions of people. And lenders before making any credit decisions will pay them for these credit reports, saving them countless millions in the process, by helping them tell if an applicant will or won’t likely be able to pay back a loan. And don’t think that this is anything personal. Any person that applies for new credit cards or other types of financing is checked up on from one or more of these credit bureaus. A compilation of your credit report is provided when your lender asks for it. Containing all the information from lenders, you and from any court records.

To get your credit report, you must provide all your details, including your Social Security number. You may need to include your previous address if you’ve moved in the last two years. To make certain that there are no inconsistencies in your reports, it is advised that you check your credit report from all three credit bureaus just as lenders do.

In today’s financial world and in the world of mortgage, these three credit bureaus are the only ones that matter. In fact they are collectively known as “the major credit bureaus”. It’s important to know that your lenders will typically come back to you with multiple scores, which can be quite confusing to know exactly which “score” you need to review.

But if you’re looking to mortgage a home, the scoring system looks like this:

 

  • TransUnion – FICO Risk Score 04
  • Equifax – Equifax Beacon 5.0
  • Experian – Experian/Fair Isaac Risk Model v2

 

Each time a mortgage lender checks someone’s credit, it’s actually checking the scores for these products. Takes the median of the three (the middle one), and this is your credit score.

Also, if you are applying for a joint mortgage, lenders will automatically choose the lesser of the two middle scores. Credit scores are called often called “FICO scores”, named after the Fair Isaac Co.

 

Read the rest of the article at Home Loans For All

 

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