Wednesday, September 21, 2016

7 Things You Should Know About Credit Scores

One of the main factors in determining your eligibility for a mortgage loan at the Lake of the Ozarks is your credit score. While most people may know what a credit score is, they don't necessarily understand how they work. In today's blog, your favorite Lake of the Ozarks mortgage lender offers a few things you should know about credit scores.

1. Your Credit Report Is Different From Your Credit Score. 

Your credit report includes details of your credit accounts, how often you apply for credit, debt collection accounts, etc. Your credit score is a 3 digit number that is figured based on those details of your credit report. 

2. You Have More Than Just One Credit Score.

There are 3 different major credit bureaus, Equifax, TransUnion and Experian. Each bureau uses a different approach to determine your credit score. As a result, you have 3 different credit reports, with multiple credit scores. When a mortgage lender at the Lake of the Ozarks pulls your credit report, they will be provided with 3 credit scores, one from each bureau. 

3. Your Credit Scores Are Based On 5 Core Factors.  

Your credit score is based on the following factors: payment history, credit utilization, average credit age, account mix and inquiries. These factors are listed in order of importance, and therefore your payment history has the largest affect on your credit score.

4. Credit Scores Are Used For A Variety of Things.

Credit scores are factored into a lot of different situations. While your score can affect insurance costs and employment, the most common situations where credit comes into play is when you are applying for a home loan at the Lake of the Ozarks.

5. Not Everyone Has a Credit Score.

If you've never applied for or used credit, you won't have a credit history and therefore, won't have a credit score. Not having any credit history can make it just as hard to obtain a mortgage as having a low credit score because the lender doesn't have any facts to base whether or not you can pay back your loan on.

6. Checking Your Own Credit Will Not Impact Your Score.  

You've probably heard that checking your credit can have a negative impact on your credit score. While there may be some truth behind that, checking your score yourself will not hurt your score. However, hard inquiries, like when a lender pulls your score for a loan or credit card, can have a negative impact on your score. Luckily, the effect is small and temporary.

7. You Can Always Improve Your Credit Score.

Just because you have a low credit score and maybe you can't get approved for a loan right now, doesn't mean it'll be that way forever. There are a variety of things you can do to improve your credit score over time. Check out our blog titled, "7 Tips for Building Your Credit Score."

If you have more questions about your credit score and how it can affect your Lake of the Ozarks mortgage approval, give me a call at 573-746-7211. I'm here to answer your questions and help you with all your financing needs. I'm committed to working with you every step of the way, for a smooth mortgage process!

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Sr. Loan Officer
NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049

Direct:  (573) 746-7211


**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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