How is credit pulled when applying for mortgage?

Posted On: September 2011

THE KREDIT KORNER WITH THE KREDITGURU, GARY NOVEL

Editor: Tiffany Brewington

Q: If I apply for a mortgage, is my credit score pulled from all 3 bureaus? Which credit score should I pay attention to?

A: When you apply for a mortgage, the mortgage company will pull your credit from all three of the Credit Bureaus, (Experian, Equifax, and Transunion). They do this because the banks need to make sure nothing gets missed, as some companies report to all three Bureaus, and some only report to one or two of them. The banks will require all three Bureaus pulled to make sure there are no "surprises" once the process starts.

When they pull all three Bureaus, they get three Credit Scores, and they toss out the high and low score, and base your loan on the MIDDLE score. It is not an average of all three scores, but the middle one of the three, and they do not care which Bureau it come from.

Nowadays, most of the lenders are looking for that middle score of 640. So if your high score is 800 and your low score is 400 and the middle is 641, you are going to be approved for the loan.

Fair Isaac (FICO) scores range from 350 to 840, with the higher the Credit Score the better.

For all your credit-related questions, contact Gary Novel, President of Kreditguru, Inc at 630/624-9557 or kreditguru@aol.com

Posted On: September 2011

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