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Understand Your Credit Ratings

Perhaps the most important element of obtaining a good rate on your mortgage is your credit history.  This section is designed to help you assess your possible credit rating and what type of terms you can expect from a lender.


When you apply for an equity loan from lenders, brokers or private investors the most important factor is equity. In some cases it is only equity that determines your ability to obtain a loan. 

Before You Go Shopping 

If you plan to "shop around" for a mortgage we advise that you take the time to order your credit report from all three credit reporting agencies, and distribute them to the lenders you wish to "shop" with. We advise this because each time a potential lender pulls your credit, your FICO score goes down.  In some instances this can mean the difference between qualifying for a conventional mortgage (at good rates) and a non-conventional at rates less favorable.

The three major credit reporting agencies are:

General Guide to Credit Ratings

This is a general guide to what is called "A-B-C-D" credit. These grades are typical of the requirements used by many lenders, but are not absolute grades. Individual lenders typically have similar but somewhat different specifications.  Keep in mind that late payments, called "lates", are generally tracked within the previous 12-month period.


Please keep in mind these are "general" guidelines.  Some lenders assign different grades or use different grade definitions based upon their own method of evaluation.

Always remember to check your credit report for errors once a year! It is estimated that 50% of all credit reports contain errors significant enough for an individual to be denied a loan!

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