DAVIDSONVILLE, ANNAPOLIS, EDGEWATER, ARNOLD AND SEVERNA PARK REAL ESTATE
“It can be kind of confusing.” – Tom Quinn, V.P Business Development for myFICO in “The Scores That Matter in Mortgage Lending.”
Unless you’re a buyer who falls into the all-cash category, once you begin to zero in on buying your next Annapolis home, you will already have been paying close attention to your bill-paying reputation. You will probably have requested one or more of the free credit score reports the reporting agencies furnish free of charge once a year.
Mortgage lenders use Experian, TransUnion, and Equifax in differing ways, and since each follows its own system to rate your creditworthiness, their scores differ. And it’s more complicated than that because the agencies offers lenders different scores depending on the type of loan being considered.
In fact, the Consumer Financial Protection Bureau once ordered TransUnion and Equifax to pay millions of dollars in fines “for deceiving consumers about the usefulness and actual cost of credit scores they sold to consumers.” So Equifax’s Score 5 differs from its Score 8—and Experian’s Score 2 differs from TransUnion’s Score 4…and so on. FICO will sell consumers access to “28 of the most widely used” score versions—but when you try to find out which scores any given lender is currently using, you’re unlikely to come up with a useful answer.
That means that the successful way to navigate the system is common sense-based. As FICO acknowledges, although evolving credit models “keep pace with changing consumer credit behaviors,” all have a “similar underlying foundation.” All are designed to show the lenders who’s likely to pay obligations faithfully. So keep an eye on your reported scores, dispute any black marks that are inaccurate, and take all the well-publicized steps that create strong scores: use a variety of credit types, make payments on time, etc.
It’s as simple as that.
Establishing and maintaining strong credit is a career-long affair—and buying your next Annapolis home will be a major hallmark in that career. I hope you’ll give me a call to help you reach that goal!
DEBORAH LAGGINI, Long and Foster Real Estate, Annapolis, MD 21403
CELL 410.991.6560
EMAIL [email protected]
REALTOR, Annapolis, Davidsonville, Edgewater, and Surrounding Communities