residential mortgages

How much does my credit score really matter?

creditscore

It’s amazing to me that many of the clients that come to us seeking a mortgage or loan do not know their credit score.  In fact, not only do they not know their credit score most of them have never even seen their personal credit report.  I find it amazing because your personal credit score is one of the core criteria that a bank or lender will use when deciding to approve your request for a mortgage or loan.

You might be thinking “What’s the big deal?”  Well here are three things that make your personal credit score a big deal:

1.  Your score determines the interest rate for your mortgage or loan and what type of bank or lender will consider your mortgage or loan request

2. Your credit score is a reflection of your credit history which tells a bank or lender how well you use credit

3.  Your credit score is based on dozens of factors that collectively paint a picture for a bank or lender of the type of credit risk you are

In our experience, 3 out of 10 credit reports have a mistake or an error on them that negatively impacts a borrower who is seeking a mortgage or a loan.  It may be an old credit card that had a small balance on it that was never closed.  It might be a loan that you paid off that is still reporting as active.  It may be a series of late payments on a credit line that you don’t even have.

And by the way, every time someone (a banker, broker, specialist, etc.) checks your credit – your score goes down.  Don’t let other people check your credit.  Get a copy of your own credit report and give it to them to use until you are ready to move forward with them on an actual transaction.  If they don’t know how to use the credit report you give them, find someone who does because you should not be risking your credit score unnecessarily.

You can check your credit score here and get a copy of your personal credit report to make sure it is correct.

“The most difficult thing in life is to know yourself.” – Thales

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