The Simple "Cure" that Removes Credit Mysteries
A large number of credit card companies now offer an opportunity to their customers to see their credit scores. Consumers receive "previews" of their credit scores via their credit card's monthly statements.
Opportunities to view or receive credit scores are available elsewhere too. Credit Bureaus, credit monitoring sights, when applying for car loans ... all afford these opportunities to consumers.
These credit scores can serve as a measurement or "ruler" of sorts. When you know your credit score:
- You know how well you've paid bills and obligations
- How much of your credit availability you've utilized (debt owed)
- You're alerted to possible errors, identity theft, etc. taking place
- What options you may have available to borrow
- What financing programs may be available to you
- How soon you may be able to buy
- More ...
As a Chicagoland Mortgage Originator, I think the availability of this knowledge is a huge plus. Especially for those thinking of buying a home or borrowing money.
But depending on where you gain your credit scores, they can vary. Sometimes as much as 20, 30, 40 points or more. And many consumers are unaware of this.
It's not unusual for my clients to report having received considerably higher scores from their credit card companies versus the scores received from their Residential Mortgage Credit Report (run when applying for a mortgage and relied upon by Lenders during Underwriting).
This can be somewhat frustrating for my eager hopeful home buyers (or those refinancing) to hear and digest. Not to mention a bit "deflating".
But fact is: If you want to know your actual mortgage qualifying credit scores to buy a home in the Chicagoland area, you must talk to me/a Mortgage Lender.
The topic of credit scores can be a bit intimidating to many. There's often an air of "mystery" that surrounds them. Several things contribute to this. That you must reach out to a Mortgage Lender to gain the info needed, is just one.
Just knowing what a "credit inquiry" is certainly helps. The simple explanation is:
A credit inquiry is when a credit report is run to possibly obtain credit.
There are 2 types of credit inquiries though:
1. Soft Inquiries:
An individual viewing their own credit
A 3rd-party extending promotional offers
2. Hard Inquiries:
3rd-Party credit reviews
(It's important to remember: Only a Hard Inquiry can drop a consumer's credit scores.)
It's said that "timing is everything". That's particularly true regarding credit inquiries ...
The timing of inquiries made can alter and affect the scores received. But in most cases: ONE inquiry on a credit profile for a Mortgage/Bank/Credit Union credit report pull will notlower a credit score.
I've seen identical credit scores from all 3 Credit Bureaus received when a second credit report was pulled for a potential Borrower inquiring about Mortgage Pre-qualification ... or when re-applying for a mortgage loan.
However: Multiple inquiries of credit for a variety of credit uses (car loans, credit cards, and mortgage loans) within a "short period" of time, will lower credit scores.
Credit, credit inquiries, credit scores can seem so darn mysterious and confusing. But the good news for future home buyers and borrowers is: Information, guidance, and assistance is easily and readily available.
The most reliable form of credit scoring (for mortgage purposes) is available only from a Mortgage Lender. It IS important to know and understand them ... and their accompanying strength.
Simply, let's talk. The conversation will be a fact-finding one. Questions will be asked back and forth ... by each of us.
But the more complete my understanding of your finances, credit and debt, hopes and plans ... the better I can answer your questions, guide and prepare you, and assist you with your financing needs.
This beneficial conversation can reveal:
- Your actual (Mortgage) Credit Score
- The most advantageous way to address debt and improve/maximize credit scores
- What is the Mortgage Process?
- Down Payment requirements
- Pros and cons of the Mortgage Options available
- What costs are associated with buying and financing a home?
- What Monthly Payment can I be qualified for?
- What Monthly Payment am I comfortable with?
- Much more ...
Our conversation together (or your own local lender) is the right way to start on the path to home buying. This is especially true for those hoping to become first time buyers.
Helpful Tip: Use the time leading up to your home purchase wisely. While still renting ... prepare and plan ahead. The earlier or further out from the time you hope to purchase, the better.
This is especially true if you have built no credit history, have little credit established ... or are facing credit challenges. Time can be a valuable friend in these instances. So is the advice and guidance you can receive from an LO.
Whether it's seeking knowledge of credit scores, gaining insight into your credit history, or receipt of information regarding some other portion of the home buying or financing process ... a conversation is the best place to start.
That simple conversation can "cure" and remove any mystery surrounding your credit ... and propel you towards home buying and financing success ...