Your credit score will be a significant factor in the lender’s overall evaluation of your loan application. The credit report tells the lender a lot about your past payment history and the amount of current debt obligations that you have. There are actually three different bureaus that report on your credit and therefore three separate scores. Most lenders will use the middle of the three scores, but you may also find some variations on this.
The three bureaus are:
A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each agency provide you with a free copy of your credit report, at your request, once every year, from www.annualcreditreport.com. It is a good idea to take advantage of this and make sure that the information that is being reported is accurate and that you have an understanding of what is affecting your credit score.
However, when you apply for a loan, the lender or mortgage broker you work with will have to “pull” their own credit report to submit with your application. Typically the lender will obtain a “tri-merge” credit report which pulls your score from each of the three bureaus. Each of the bureaus reports a little bit differently and therefore the scores may vary a bit on each of them. In some cases you will find significant differences among the three scores, particularly if one is reporting some inaccurate information that the others are not picking up.
At Marimark Mortgage, we can also assist you in clearing erroneous items off of your credit report. Once you provide us with the documentation that indicates that an item is improperly reported, we submit it to our credit reporting agency, which in turn works directly with the three bureaus to correct the information. This can often be completed in just a few business days. This can make a tremendous difference in the loan and rate for which you qualify.
Also, we have technology which enables us to assist you in raising your score. For example, if the score you need to qualify is 620 and your middle score is 617, our credit reports automatically tell us whether you have the potential to increase that score and specifically what you need to do to get the desired result. In some cases it is as simple as paying down an account balance by a small amount. Once again, we’ll tell you what action needs to be taken and once you provide us evidence that it’s been done, we will submit it to the credit company and receive updated scores within a few days.