What is a Credit Score?

What is a credit score?

The credit score is a computer-generated summary calculated at the time of the request and based on information a consumer reporting agency or lender/broker has on file. The scores are based on data about your credit history and payment patterns. Credit scores are important because they are used to assist the lender/broker in determining whether you will obtain a loan. They may also be used to determine what interest rate you may be offered on the mortgage. Credit scores can change over time, depending on your conduct, how your credit history and payment patterns change, and how credit scoring technologies change.

Because the score is based on information in your credit history, it is very important that you review the credit-related information that is being furnished to make sure it is accurate. Credit records may vary from one company to another.

The possible credit scores used by Equifax range from a low of 300 to a high of 850.

The possible credit scores used by Experian range from a low of 395 to a high of 848.

The possible credit scores used by TransUnion range from a low of 375 to a high of 900.

As part of the prequalification process, we provide all of our clients with a copy of their credit report. This will allow you to review your credit information and ensure that is accurate.

** If you have completed the prequalification worksheet, you should have received a copy of your credit report either via email or postal mail. If you have started the prequalification process and you have not been provided with a copy of your credit report, please contact us. **

If you have already received a copy of your credit report from us, here is some information on your credit scores and where to find them on the report.

** SEE PAGE 1 of your Credit Report **

In the lower-third of the 1st page of your credit report, you will find your credit scores and the key factors that are affecting your score. Here is an example:

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BUREAU SCORE INFORMATION

EFX BEACON 5.0 (APP) = 720 Factor: 0014, 0012, 0030, 00008

     00014 LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
     00012 LENGTH OF TIME REVOLVING ACCOUNTS HAVE BEEN ESTABLISHED
     00030 TIME SINCE MOST RECENT ACCOUNT OPENING IS TOO SHORT
     00008 TOO MANY INQUIRIES LAST 12 MONTHS

XPN FICO-II (APP) = 736 Factor: 14, 15, 24, 08

     14 LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
     15 INSUFFICIENT OR LACK OF BANK REVOLVING ACCOUNT INFORMATION
     24 LACK OF RECENTLY REPORTED BALANCES ON REVOLVING/OPEN ACCOUNTS
     08 NUMBER OF RECENT INQUIRIES

TUC FICO Classic 98 (APP) = 683 Factor: 040, 014, 024, 003

     040 DEROGATORY PUBLIC RECORD OR COLLECTION FILED
     014 LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
     024 NO RECENT REVOLVING BALANCES
     003 PROPORTION OF LOAN BALANCES TO LOAN AMOUNTS TOO HIGH

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In the example above, the consumers three credit scores are

720, 736 and 683

Because the report is a tri-merged report (containing infromation from all three credit agencies, the report contains one score from each of the three -- Equifax, Experian and TransUnion. For contact information to the credit bureaus, click here.

For a complete list of factors affecting credit scores, click here.