Friday, October 19, 2012

Which Credit Score is Used?

There are three credit reporting agencies: Experian, TransUnion, and Equifax.  When a lender pulls someone's credit, they get a score from all three agencies.  The score that is used to determine whether the borrower qualifies for a mortgage (and what their interest rate will be) is the middle score.

If two people are applying for a loan together, then the score that is used by the lenders is the lowest of the two middle scores.  If one borrower has a mid-score of 720 and the other borrower has a mid-score of 680, the loan approval and the interest rate would be based off the 680 score.

If one of the borrowers has a mid-score that is too low to qualify for a loan, or that is too low to get a good interest rate, then the person with the higher score should be the only person applying for the loan.  The only potential problem is that the income of the person whose credit score is not being used cannot be counted to qualify.  If someone's income is counted, then their credit score needs to be counted.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

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By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

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