Consumer Mortgage Credit Report

Credit scores are derived from data contained within a credit report, and represent a statistical risk of loan default.  History and research have shown that higher credit scores have a lower risk of loan default.  Each of the three national credit bureaus; Equifax, Experian, and Transunion, have their own proprietary mathematical algorithm that produce the credit scores.  

There are also "filters" that produce different scoring results; for instance, mortgage credit scores accessed through a mortgage lender are often different that the scores produced from a car loan lender, or an insurance company.  when shopping for a mortgage loan, it's important to know what your mortgage credit scores are. 


Composition of a Credit Score

Credit scores range from a low of 300 to a high of 850.  This chart breaks down the five categories which comprise your credit score by percentage weight.  The most important factor in the calculation of your credit score is payment history, followed by how much you owe, followed by the length of time the trade lines have been open.  The last two; new credit, and types of credit used, are weighted equally.


Credit Score Breakdown


Trade Lines

Trade lines are your credit accounts.  Lenders report the history and performance data for each account established with them to the credit bureaus.  The data reported includes the date the account was opened, credit limit, loan amount, current account balance, and your payment history. 

In addition to satisfactory minimum credit score's, lenders also require that specific account types and length of time established meet certain criteria.  For instance, mortgage lenders generally require two trade lines with a minimum 12 month history, or 1 trade line with a minimum 12 month history and one housing trade line, such as rent, with a minimum 12 month history, evidenced by cancelled checks.


Minimum Credit Score Required to Obtain a Mortgage

This depends on a few factors such as the source of funding, type of loan, amount of down payment, debt-to-income ratios, as well as additional requirements imposed by the particular lender you have chosen to work with.  Generally, the minimum credit score required to obtain a mortgage will fall into the 620-640 range.


Obtain a Copy of Your Credit Report and Credit Scores

There are a couple of ways to get a credit report and assess your credit scores.  You can obtain a free credit report from www.annualcreditreport.com.  This report is a good way to view what is in your credit profile, but it will not contain mortgage credit scores.  

For mortgage credit scores, it will be necessary to have a mortgage lender access your credit report.  On the right side of this page is a authorization form you can receive, which gives permission to run your credit report.  Upon accessing your credit report and mortgage credit scores, we can discuss your mortgage loan options with you.


Credit Report Inquiries

When you apply for a loan, you will typically authorize the lender to access your credit data.  Because credit report inquiries may negatively impact credit scores, allow one lender to access your credit report while you're shopping for your loan.  Use this report with any of the lenders you are inquiring with in order to limit the negative effect on your credit scores. 


What To Do If Your Mortgage Scores Are Low

Credit reports often contain errors, especially for common surnames.  Carefully review your credit report for accuracy and dispute incorrect information with the credit bureau's, and/or businesses reporting the erroneous information.  Mortgage credit scores can be dramatically affected by seemingly insignificant errors, so it's important they be accurate.  On the right side of this page, you can receive a dispute form and use it to object to incorrect information.


We Are Here To Help

Call us at 303-743-9498 if you need help understanding your options; we are happy to help.