Credit Score Basics to Know When Buying a Home

Buying a home is one of the most exciting times in our lives, but it is also stressful! When you are applying for a mortgage loan to buy a home, your lending agent will take a look at your credit score. Lenders are interested in your credit score because it can let them know how much of a risk you are. Make sure to keep these credit score basics in mind to ensure that you are able to qualify for a loan when shopping for a new home!

Your credit score is compiled separately from three different companies, Equifax, Experian, and Trans Union. All three of these companies calculate your score differently by using their own devices and criteria. Equifax scores range from 334 to 818, Experian scores range from 320 to 844, and Trans Union scores range from 309 to 839.

Your credit score is a reflection of different information, based on various situations such as if you pay your bills on time, late payments, and how much money you owe creditors. It also includes the number of inquiries for your credit score that is made by employers, landlords, and lenders. The higher your credit score, the better your loan terms will be.

When you apply for a loan, you are giving your lender permission to pull your credit score. Once they run your credit score, they will give you a copy of the report. The report they give you is not the full report and will only give you certain key factors that are hurting your credit score, such as if you have had too many inquiries in the last 12 months or if you have too many accounts with balances.

For all of your home buying needs throughout the Contra Costa County in Northern California, contact Cary Amo in Lafayette. I will work with you to ensure that you are able to move into the house of your dreams, even if you do not have a perfect credit score.

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