When you are looking to obtain a mortgage your credit score is a very important factor in determining if you are qualified. A typical applicant has three credit scores, one from Transunion, one from Equifax and one from Experian. It is very important to understand what a credit score is and how it is used. Each credit union will give a different score, so which one is used to determining your eligibility? Usually, lenders take the middle credit score and use this to determine if you qualify.
If you are a single borrower, for example, and you have a 695 from TransUnion, a 655 from Equifax and a 682 from Experian. A lender will choose the middle score which is 682 for the qualifying score. If a single borrower comes in and only has one or two scores, the lender will have to follow the lender’s specific guidelines to factor in the qualifying score. On the norm, this usually means the lower of the two credit scores will be chosen. If you co-borrow, for example, a husband and wife, and the husband have a middle score of 682 and the wife has a middle score of 764, the lower of the two middle scores will be used.
If you are currently in the market for a home mortgage, then understanding how the qualification process works is very important. Remember to choose a lender by shopping around for the best deal and a lender who works well with you.
