Moreover, don’t load up your credit balances either (see Debt Utilization below).
Think about it this way: an auto dealer cares more about your payment history on your past auto loans than any other account.ĭon’t Go Shopping: The #1 rule is don’t open any new credit during the loan process until you check with us. The main reason is because the mortgage industry report’s will use a different credit algorithm than that of a generic credit report. Your Report Is Different: A credit report that a consumer pulls will have different scores than a report a mortgage company pulls. So don’t be afraid to have your credit pull by a few mortgage lenders. Think about it this way, the credit models don’t want to discourage someone from shopping around and being an informed consumer. Multiple mortgage inquiries, like multiple automobile inquiries, are treated as only one inquiry if made within 45 days of each other and typically don’t hurt your credit. Example: 720-739 is “A-“, 700-719 is “B+”, etc.Ĭredit Pulls: Mortgage inquiries on your credit report don’t hurt your score (99% of the time). After that every 20 points could impact your loan on certain programs. An “A+” credit rating is anything 740 or higher. Score Ranges: While credit scores technically range from 350 to 850, with 850 being the best, the very vast majority of reports we see will have scores ranging from 550 to 780. In this instance the credit score for the credit determination is Jane’s 710. Example: John and Jane are getting a mortgage and John’s scores are 720, 718, and 698 while Jane’s scores are 710, 702, and 780.
Three Scores: You have three credit scores (one from Experian, Equifax, and Transunion) and the mortgage world uses the lowest mid-score of all borrowers for the credit decisions.