So, why is it important to check credit rating? On this page, you'll discover how to raise your mortgage credit, using information from your credit report.
The information below can help you to raise your scores, so use this as one of our many credit repair tips.
Today mortgage lenders are using third party credit reporting agencies to come up with your "middle score."
These credit bureaus report your scores and the lenders look for the "middle" number.
For instance, if one bureau has a number of 680, another a score of 720 and the third a score of 734, the 720 is your middle score which is used to check your eligibility for mortgage credit.
Mortgage lenders look at the score in the middle to determine your credit risk.
A score of 620 is usually the cut off for "good" credit risk, everything below 620, is many times considered "below normal." So as you can see, this is a delicate balance you must achieve in order to reach your goal of getting approved for a first time home buyer mortgage.
It is definitely preferable to have a 700 or above - especially for conventional home loans.
However, with FHA insured mortgages, a credit score as low as 580 is acceptable.
The higher your score the lower the risk to the lender and the better mortgage interest rate you can find.
So knowing the middle score, by reading the three different credit reports, is important.
If your middle score is lower than 580, my credit repair tip to you is to begin a repair program to raise your scores.
Keep in mind that each credit bureau uses their own scale to calculate the scores on each report. The formula for achieving good mortgage credit is to watch your middle score.
From this data they research your history and how you handled credit in the past. Each lender uses their own rating scale based on the scores on your credit report to determine your creditworthiness.
The three bureaus each have their own ranking system in order to accomplish this. That is why the scores for all three of them are different. However, lenders typically choose the middle score, often times this is referred to as your "FICO" score.
Thus you need to see their compiled reports and scores individually. Once that is done, you can see which one is in the middle. Since lenders use that score, you should be concerned with what that number is. That is the number that can make a difference between success in obtaining mortgage credit or denial.
If you find the middle credit rating score is low, investigate all three reports. There may be information that you know is wrong on them. If so, clean them up. By doing this you can raise one or two of your scores. Now a different number will be in the middle!
Hence use this credit repair tip by learning what your middle credit rating score is. Then dig deep into those reports to improve that rating.
Now that you understand why it's important to check credit rating, you're ready to proceed to credit repair tip #10 next.
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