Credit scores can make or break a home-buying deal.
Lenders know the higher your score, the lower their risk of you defaulting on your mortgage and zero in on your score when you apply for a mortgage.
VantageScore Solutions, the company behind the VantageScore credit score model, says the rate of default for homeowners with good credit (a credit score of 700 or better based on the VantageScore scale of 501-990) has decreased dramatically since 2009.
Also, the higher your score, the better your position to negotiate for a lower interest rate and other favorable mortgage terms that can shave thousands of dollars in interest off the cost of a loan over the course of a year.
Your credit score is a numerical rendition of your credit report. Your credit report reveals how well you handle credit.
Know your score and the status of your credit report before you apply for a mortgage to prevent surprises when you sit down with a mortgage lender or broker.
“Check your credit as soon as you begin to think about purchasing a property. An alarming number of mistakes and surprises greet buyers. If you find your dream home, you might still be able to get a loan with a minor blemish, but why pay more in your monthly loan payment because of a reporting error. Allow yourself ample time for corrective action and avoid feeling squeezed under pressure. Buyers have paid debts that were not theirs, solely to clear their credit, in order to clear and close a loan. Credit scores matter,” said Deborah “Deb” Madey, broker of Peninsula Realty Group in Red Bank, New Jersey.
Your credit report from each of the major three credit bureaus, Experian, Equifax and TransUnion, is free – no-strings-attached – once a year from AnnualCreditReport.com.
Other sites offering “free” credit reports require you to buy credit monitoring or other services you likely don’t need, if you keep tabs on your own credit report.
Your credit score isn’t free, except under certain circumstances, but the cost is worth the price of admission to see where you stand.
