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The Business of Real Estate

Important Info about Your Credit Score!


There was a feature story in this morning’s Austin American-Statesman about the fact the what people call “my credit score” can mean different things in different situations and from one potential lender to another:

Credit scores aren’t always black and white

There are three major credit reporting bureaus — Equifax, Experian, and Transunion.  Most mortgage lenders use the “middle FICO” — the one score that’s between the other two — but underwriters rely on many other factors in assessing the risk profile of a loan applicant.  Knowing what’s in your credit report, and how the three major credit bureaus rate you, however, is a very important starting point:

About credit scores

What’s in your FICO® score

Don’t wait until you’re ready to apply for a mortgage to get interested in this.  You are entitled to a free credit report each year.  There are a number of services where you can get that information.  Most will offer the opportunity to subscribe to additional information, but if you want the most hassle-free experience visit the site that is operated by the credit bureaus themselves:

www.AnnualCreditReport.com

Note that this will show you what is on your credit bureau reports, but it will not give you your bureau credit scores.  That’s a little more complicated, and it’s not free, but you can purchase your credit scores from all three bureaus on that same website after you request your free credit report.

Again, start ahead of time — a few months ahead if possible — so that if you see credit issues that you disagree with on your reports you have time to dispute them.  There is some great information about that process on the Federal Trade Commission’s website:

Credit Repair: How to Help Yourself

As that web page notes, there are companies who will assist you in boosting your credit scores — for a fee.  Some are legitimate.  Many are not.  Please be careful here.  Many times I have met a client who wishes to buy a home shortly after they have spent several hundred dollars with one of those companies.  In most cases, they would have been better off using that money to pay down outstanding debts or just keeping the cash in the bank.  Most good mortgage lenders will offer this advice for free, so get a lender recommendation from your real estate professional and begin that dialogue early.

Credit scores are used for many things these days, from decisions on car loans to mortgage loans, from credit cards to “same as cash” arrangements for furniture and appliances.  In some states they are even used in pricing insurance.  With information that affects that much of your financial life, don’t wait and get surprised.  Take advantage of the many tools that are available.

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About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

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