Don’t Be Fooled!
Posted on March 6, 2020
You already know that a great credit score can get you a better deal on your mortgage. So you’ve been putting in the work and keeping an eye on your credit score as it gets better and better. That’s great! But, how can you KNOW when it’s time to move ahead on actually applying?
The biggest issue I’ve seen with clients who watch their credit score using apps like Credit Karma, Credit Sesame, or looking at their bank’s app is that they don’t know that this is just a CREDIT SIMULATION, not an actual CREDIT SCORE!
A credit SIMULATION typically does not look at your actual FICO score and do not always pull information from ALL THREE credit bureaus, which can give you a skewed idea about your true FICO score. According to customer reviews on ConsumerAffairs.com Credit Karma customers have reported their Credit Karma scores being much higher than their actual FICO score!
Even if you are able to get accurate information about your credit scores from all three bureaus, such as taking advantage of your right to review your three credit reports once a year, you may be confused by the different SCORING MODELS used to determine your credit worthiness.
Every type of lender has its own strategy to determine the LEVEL OF RISK they agree to take based off an individual’s credit sphere. This is why your credit score when buying a car will likely be DIFFERENT than when buying a home. This can be a surprise to many clients who know they have solid credit history, but find out their is a lot different than expected when applying for a home loan.
The only real way to know what your credit will look like to a lender is to start the application process and use the lender’s knowledge of what you need to do to improve your score if necessary. It seems like putting the cart before the horse, but it can be very helpful to clients to start working months or years in advance to improve their credit BEFORE they need it, rather than waiting until they NEED to get into a home.
The biggest issue I’ve seen with clients who watch their credit score using apps like Credit Karma, Credit Sesame, or looking at their bank’s app is that they don’t know that this is just a CREDIT SIMULATION, not an actual CREDIT SCORE!
A credit SIMULATION typically does not look at your actual FICO score and do not always pull information from ALL THREE credit bureaus, which can give you a skewed idea about your true FICO score. According to customer reviews on ConsumerAffairs.com Credit Karma customers have reported their Credit Karma scores being much higher than their actual FICO score!
Even if you are able to get accurate information about your credit scores from all three bureaus, such as taking advantage of your right to review your three credit reports once a year, you may be confused by the different SCORING MODELS used to determine your credit worthiness.
Every type of lender has its own strategy to determine the LEVEL OF RISK they agree to take based off an individual’s credit sphere. This is why your credit score when buying a car will likely be DIFFERENT than when buying a home. This can be a surprise to many clients who know they have solid credit history, but find out their is a lot different than expected when applying for a home loan.
The only real way to know what your credit will look like to a lender is to start the application process and use the lender’s knowledge of what you need to do to improve your score if necessary. It seems like putting the cart before the horse, but it can be very helpful to clients to start working months or years in advance to improve their credit BEFORE they need it, rather than waiting until they NEED to get into a home.
I’d love to help you figure out how to start working towards owning a home NOW! Comment down below! 👇
