Have you heard about the middle score? Perhaps you are wondering how is this score figured? Learn how lenders look at this score and how it affects you below.
Mortgage lenders pull credit reports from all three bureaus, Equifax, Experian and TransUnion. Then they compare the 3 credit scores.
For instance, I had a client who was buying a four-unit, he had a 580 with TransUnion, a 622 with Equifax and a 634 with Experian, thus the score in the middle was 622.
Most lenders use that score in the middle to determine your creditworthiness.
If that credit score in the middle is not very high, then you need to compare the three reports you have and see how they are different. Perhaps there is incorrect information on one or two of them.
Then take the time to clean those reports so your score will be higher. You can do this yourself by doing a little credit repair.
Another phrase that is used quite often is "average credit score." Some think this is the middle score. That is not true. The tree scores are not averaged to come up with the middle one.
The average credit score can vary from state to state. It would make since that this would vary. Average incomes vary from state to state so you would expect the credit score averages to vary also.
Averages are not as important as that score in the middle. That's what lenders consider when looking at your loan application.
Today it's not hard to obtain a copy of your credit report from all three agencies. So take the time to see what your score in the middle is!
Since lenders rely on this score to determine if you qualify for a loan or not, small improvements can make huge changes. Perhaps your credit isn't really that bad, but one reporting agency score is pulling your score in the middle down.
Take a look at that report and see if everything is being reported accurately. Perhaps you have a loan that is closed, yet it is still reflected on the report. How could that happen? Perhaps you have paid off a medical bill, or your car and they haven't taken it off your report. That would be a small change that could make a huge impact.
So don't give up.....look at what you have and improve it.
How to do Credit Repair Yourself gives you step by step instructions so you can get started.
Home Buying Experience read what others have done and benefit from their successes or mistakes.
Home Buying Programs explains the different mortgage programs so you can decide which one is best for you.
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