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Buying a home in Chalfont PA? Your mortgage loan choices hinge heavily on your credit scores. If you have a long, lengthy credit history and pay your bills on time, you probably have great credit. If you’ve paid your bills late and maxed out your credit cards, your credit scores may be low.
If you’re planning on purchasing a home and living in Chalfont PA, understand which credit reports mortgage companies use.
There Are Three Credit Bureaus
TransUnion, Equifax, and Experian are the three main credit bureaus. Mortgage companies generally pull all three bureaus and use them in approving or denying your loan application. These bureaus are competitors, so one doesn’t share the information they gather on you with the other two. This is why there might be a line of credit showing up on one that isn’t seen on the others.
Scores Can Vary Greatly
Each bureau uses its own mathematical formula to weigh the different pieces of your credit history. This is how scores are calculated. Since the bureaus have different formulas, and often different types of information, the three scores are rarely the same. They can even vary by 100 points or more!
Mortgage Credit Scores Differ from the Ones Pulled Online
If you use one of the many websites to check your credit, the scores you see may not be the same as the ones your mortgage lender sees. That’s because mortgage credit scores weigh your history differently than, say, an automobile credit score. So, even if online scores look good, that doesn’t mean you will automatically be approved for a loan.
The best path toward home ownership is to talk with a professional mortgage lender, have her pull your credit, and attempt to get pre-approved. Good luck on your journey!