It is music to your ears, when you hear a buyer tell you that their score is 720+ and it should be fairly easy to get them to qualify for a mortgage loan, right? not so much. Scores for mortgage loans are determined differently, whether it is to buy a home, a car or applying for a department store credit card. More often than not, when I ask a buyer for their score, they mention getting them from online credit score sources; they are not aware that each industry uses different credit scoring models to determine an interest rate or the ability for them to get approved for a loan.
Fair Housing Corporation or (FICO), has been an industry leader for over sixty years, (1956). Other scores you might be familiar with are Vantage Score (Credit Karma, PLUS SCORE (Experian) Equifax Credit Score (Equifax) and Vantage Score
(TransUnion). Each credit bureau, (Experian, TransUnion, Equifax, use their own software program to create a score.
Some examples of further complexities in generated scores occur when a credit score is pulled on the same day by a car
dealer, a utility company, a department store, and a mortgage company; you will find a wide discrepancy on each score generated.
Both real estate professionals ad consumers should be mindful that mortgage lender credit scores are the most conservative
due to the amount of credit generally required to purchase a home. Helping a potential buyer to understand these factors, prior to a home search, will save time and avoid tension; for many buyers, a home purchase is probably the biggest financial investment in their lifetime so a key factor is to keep them well informed of the process.
There is a free credit report available to consumers, once a year, at AnnualCreditReport.com. While a credit score is not provided, they will see their credit history and verify and dispute any inaccurate information reported. The Consumer Financial Protection Bureau, regulates credit reporting and also handle credit report complaints.
Agents and buyers, have a successful journey in your home search and reapproval process! ELC Real Estate, Miriam Hernandez, Broker-Owner (305) 804-9394 elcrealty@gmail.com. (Source: The Business Magazine of Florida Real Estate
July 2023.