Credit Scores

Credit Scores are an important part of every mortgage loan application. A credit score is a numerical representation of a borrower’s past credit history. The scores run from 350 up to 850 with the higher the score being better. Many lenders have a minimum credit score of 620, though this can vary between lenders.

Many items go into the composition of the credit score. Among these are past credit history, credit utilization, types of accounts, and length of time accounts have been in open. Strong credit history, along with limited usage, accounts which are not open ended (installment), length of time since last late payment, and credit accounts being opened greater than one year will usually result in a strong credit score.

While credit score is not the only consideration for a mortgage loan application, it is one of the most important. The best way for a borrower to have a strong credit score is to pay all creditors on time every month. If considering a home purchase, it is wise for a borrower to be in touch with a professional loan officer who can provide information on credit scoring and pull credit information.

If the credit score is below what it should be for the type of loan being applied for, a professional loan officer can direct the borrower to seek advice from a credit specialist with a credit bureau. While a mortgage company or loan officer is not a credit reporting agency and cannot change credit scores, a professional loan officer can refer the borrower to the credit reporting company that can assist.

Credit scores like many other aspects is a complex and fast-changing topic. Please contact your Loan Officer at Googain, Inc. for more information on this topic as well as others that affect the mortgage loan application process.