Buying a Home? Understanding Your Credit Score

Buying a Home With Bad Credit > About Credit Scores

In our last post, we explored how to go about buying a home with less than perfect credit. A credit score is something every single person has, whether they’re aware of their number or not. Therefore, we’re going to dedicate this article to understanding your score so that you can make the necessary adjustments and plan to buy the home you want. When you land your perfect first home, protect your investment with an Indianapolis Home Insurance policy.

How are credit scores created?

The three main credit bureaus – Equifax, Experian and TransUnion – create your credit reports, which credit scoring models like VantageScore and FICO use to come up with a score that typically ranges from 300-850. The credit bureaus can also calculate scores for you based on their own proprietary models. Your scores are typically based on things like how often you make payments on time and how many accounts you have in good standing, explains Credit Karma.

Some factors that are NOT relative to your credit score are race, religion, gender, national origin and marital status.

Why do my scores vary?

The lender you choose might only report to one or two of three main credit bureaus. In some cases, they don’t report to any of them, and it also depends on how frequently they update reports and the scoring model that the lender utilizes.

What types of factors affect my score?

  • Payment history.
  • Types of credit lines open (mortgages, auto loans, school loans, credit cards, etc.)
  • The total amount of debt you carry.
  • How long your credit lines have been established.
  • The number of accounts you have in good standing.
  • New lines of credit you open.
  • How much of your total credit you are using.

About Walker & Associates

Your home is where your heart is, and we understand that taking the right steps toward protecting your investment provides the necessary peace of mind. For the insurance aspect of house hunt, contact us online at Walker & Associates Insurance, or by phone at (800) 213-7126.

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