How does my credit score affect my mortgage application?

A credit score is one of the pieces of information that we'll use to evaluate your application. Financial institutions have been using credit scores to evaluate credit card and auto applications for many years, but only recently have mortgage lenders begun to use credit scoring to assist with their loan decisions.

Credit scores are based on information collected by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. A credit score is a compilation of all this information converted into a number that helps a lender to determine the likelihood that you will repay the loan on schedule. The credit score is calculated by the credit bureau, not by the lender. Credit scores are calculated by comparing your credit history with millions of other consumers. They have proven to be a very effective way of determining credit worthiness.

Some of the things that affect your credit score include:

your payment history
your outstanding obligations
the length of time you have had outstanding credit
the types of credit you use
the number of inquiries that have been made about your credit history in the recent past

Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments won't be paid as agreed.

Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your loan application.

While your credit score is important, there are many other factors when making a loan decision and we never evaluate an application without looking at the total financial picture of a customer.

Will the inquiry about my credit affect my credit score?

An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing.

But don't overreact! The data used to calculate your credit score doesn't include any mortgage or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. In addition, all mortgage inquiries made in any 14-day period are always considered one inquiry. Don't limit your mortgage shopping for fear of the effect on your credit score.

Will I be charged any fees if I authorize my credit information to be accessed?

There is a charge to you for the credit information we'll access with your permission to evaluate your application online. You will only be charged for a credit report if you decide to complete the application process after your loan is approved.

Can you help me understand my credit report improve my credit score?

Yes, we can. Our staff is trained to read and explain your credit score to you. We will color code your report based on the five areas that make up the score. Then we'll work with you to show you specifically how you can improve it. It's a free, no pressure opportunity to study and learn about your credit report and score. Sign up for a Credit Score Review and Enhancement today.