Credit – Stress Free Mortgage

If you are looking to purchase a home or refinance, you can expect to have a conversation with us about credit. A common misconception is that the credit you find through places like Credit Karma, Experian or Equifax gives you the scores needed for a loan. However, this is not the case as these credit scores are not a mortgage credit score.
A mortgage credit score is used specifically to get a mortgage loan. It is calculated based on the same criteria you normally see for a credit score from the places listed above, however, a mortgage credit score is built through a specialty filter that takes things like collections, charge offs and credit utilization more seriously. This generally leads to a slightly different score than what you would find through your credit card company. This can be higher or lower than what you find on your own, just depending on your situation.
How can you make sure your mortgage credit score is at the highest it can be before you buy? Some obvious ones: make your payments on time! One thing that does affect your mortgage credit score is how close you are to your credit limit on each credit card. Ideally, you want to stay at 30% of the limit as higher than that does lower your score, even if you’ve never had a late payment.
One benefit to getting credit information from Experian or Credit Karma is that you can see if there are any issues with your credit, such as a late payment you were unaware of or a collection that suddenly showed up. This way, you can fix those issues in advance.
Call Stress Free Mortgage today to find out more about your credit score and how we can help you with a loan!