Know Credit Scores When Applying for a Mortgage

Allison Beatty
LoanBiz Columnist

Article Rating , 4 out of 5 based on 1 votes

If you're applying for a California mortgage, you've probably heard the term "credit score." This is score that helps mortgage lenders define your credit worthiness. Credit scores used to be somewhat secretive until recent regulations prompted disclosure of these numbers to consumers. What does all this mean and how can it affect your mortgage buying power?

Credit Score is Key to Mortgage Approval

Your credit score is important because lenders use it to determine whether you will get a mortgage or other financing – and also what interest rate you will pay. The score is based on facts such as:
  • The length of time you have had credit.
  • Your payment history
  • The amount of available credit and accessed credit.
While there are several credit scoring models, the FICO is the most common one. Also, some mortgage lenders add their own additional criteria when evaluating your credit score. Your mortgage experience is heavily weighted by every credit scoring company. If you have previously made regular mortgage payments, that would work in your favor. A history of late payments on your California mortgage would be extremely difficult to overcome.

Examine Your Credit Score before Applying For a Mortgage

Now, before applying for a California mortgage, you can find out your score and understand where you stand from a mortgage company's perspective. The scores are available through some web sites, including those run by the three main credit bureaus. In general, scores from 600 to 800 are considered "fair" to "excellent."

Credit Scores and Mortgages

When California mortgage companies process your application, one of the first things they will do is pull a credit report. Before applying for a mortgage, find out your credit score. You'll then be prepared to talk with mortgage companies about how your credit history affects your mortgage options.


About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.

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