Adjustable Mortgage Rate | Apply Online for Adjust Mortgage Rates Adjustable Mortgage Rate | Apply Online for Adjust Mortgage Rates
Best Mortgage Deal USA

Loan Type
Credit Profile

Expert Eye

More Articles

Know more about Mortgage

mortgage services uk


Credit score is the score given on the credit report by various credit rating agencies such as Equifax, Transunion etc.This score plays a very vital role in getting good mortgage deal. Credit scores vary from 300, which is the lowest, up to 850, which is the highest. 732 is the national average score.

There are four sections in a standard credit score report i.e. identifying information, public records, credit history, and inquiries. Your name, address, and social security number are considered the basic identification information. The main area to study in your credit score report is your credit history. Your account will be classified into 1 of 5 groups:  Real Estate (first mortgage and second mortgage), Installment (automobile payments, regularly paid bills), Revolving (credit cards), Collection (delinquent accounts), and other.

Each account will show the creditor/lender's name, and also the number of the account. It would also show you the day the account was opened, type of account, your amount owed, account status, and whether or not you have maintained payments. If you find something "charged off," that means the creditor tried to collect but gave up. "R1" status shows how well you have made your payments, using a system of 1 to 9. If there are any late payments on your report, you will notice a small box with 30, 60, 90, or 120, showing how many days late you were. You are doing fine, if you have a green OK and a 0.

The public data part is your main threat on your credit report. Things that might show up in this section include bankruptcy, divorce, a foreclosure, your wages having been garnished, judgments, civil actions, tax liens, or other legal actions taken that would negatively impact your credit scores. These are the most serious offenses for your credit score and will be on your report for ten years. In some instances, your nice credit score could take a hit of 300 points from these infractions.

The last part of your credit score report has a listing of all third party inquiries into your credit scores. "Hard inquiries" are started by you when you complete a credit or loan application, whereas "soft inquiries" are triggered by companies that want your business or collect a bill from you. Filling out applications for new credit every couple of weeks or having several inquiries in a 14 week period can begin to ruin a good credit score. These inquiries take only 20 points away here and there, so it's no big deal, unless your credit is less than perfect to begin with.

Thus, by knowing how to read a credit report & factors that affect credit score, one can keep a watch on these factors and maintain a healthy credit score.