January 18, 2017

Credit and Mortgage Pre-Approval Basics

Mike Dulla

Vice President, Mortgage Lending

I check my credit score online, why do I need an official credit report?

It is a common misconception that you have one credit score. There are different credit scores for different types of loans, such as automobile, credit card, mortgage, etc. When mortgage lenders pull your report, it’s called a Residential Mortgage Credit Report . Due to the way credit scoring models work, your residential credit score will be slightly different than what you see on credit karma, mint, etc. It’s important to note that regardless of the lender that pulls your credit, the score will be the same.

Will having my credit report pulled by multiple lenders affect my credit score?

When your credit pulled by multiple mortgage lenders, it doesn’t affect your credit score. The CFPB doesn’t want you to be penalized for talking to different lenders, so all credit reports run within a 45 day window count as one inquiry on your credit report. Therefore, you’re not stuck with the first lender you talk to, so make sure you’re working with an experienced mortgage banker who will advise you throughout the process.

When should I have my credit report pulled by a lender?

There is NO cost to having your credit run with United Home Loans. I recommend having your credit report run early in the finance planning stages. Many times a credit report will contain derogatory items that you’re unaware of, such as medical and utility collections. Fixing your credit with the credit bureaus takes time (and frequently some legwork), and your credit score determines what your mortgage interest rate. When you get your credit checked earlier in the process, if there is something that is recording inaccurately, you can have it updated in time to bring your score to a qualifying level or potentially better interest rate.

If you’re thinking about buying a home, United Home Loans will give you a free copy of your credit report. Contact me here or at 630-564-3272 for a complimentary credit analysis.

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