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Get Credit Score in Order Before Applying for Credit

RISMedia article recommending that you get your credit score in order before applying for credit
  • October 22 2010 - US
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Answers (2)

As a lender, there are a couple of things about credit that the majority of borrowers don't know...what their credit score actually is and if their credit needs help, what they can do to improve their scores.

In this age of a person getting their own credit report, the average person assumes that when they get a copy of their report, that the scores are going to be the same, regardless of whether it was a "free" report or if it was a report that was pulled by a mortgage lender.  My experience has been that if the free report had a mid score of a 720 for example, when the mortgage lender pulls that person's credit, it may very well be more like a 650 or so.  A credit report that is pulled for a mortgage, it obviously is weighted differently than a "consumer" credit report is, resulting in lower scores generally.

As far as getting someone's credit scores improved, oftentimes credit cards with high balances can be the culprit.  One tool that the mortgage lender can utilize is to use the "what if" simulator offered by the credit bureau.  We can go into a report and ask the computer how the scores would change if the credit card balance were reduced or possibly eliminated.  Given an increase in the credit score, can make the difference between a person qualifying or not qualifying.

If they have minimal credit, I can make suggestions there as well.

All of this being said, my opinion is this:  if a person has a question about his or her credit, have a mortgage professional pull the credit in order determine exactly what sort of credit that we are dealing with.  Then, if the credit is inadequate for whatever reason, advise them what steps can be taken to help them to qualify in the future.
  • October 24 2010
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Profile picture for wetdawgs
When are the laws going to catch up with the issue that the credit score pulled by the consumer is different from that pulled by a loan officer?  It is downright criminal (IMHO) that the consumer cannot have direct access to the score that controls many of the financial aspects of their lives.
  • October 24 2010
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