Why Mortgage Credit Scores are Important

Why Credit Scores are Important

The credit score is generated by computers and is a statistical way of predicting how you will repay debts.

If you are in good standing, like 60% of the population, your credit score will be between 681 and 816. Most banks will approve mortgages if your credit score is above 680.

There are other lenders who will approve mortgages for scores between 600-680, but the interest rate will be higher. Under 600, you are considered a higher risk and therefore, your mortgage interest rate will be much higher than the best posted rates.

Credit Scores
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Mortgage Credit Score

Your credit history shows your willingness and your ability to pay your debts. Most people incur debts – to make large purchases, for investment, for education, etc.

Lenders look at how you have handled credit in the past and how much debt you currently have. Your credit report will determine whether lenders find you credit worthy and will also influence the interest rate you will be offered.

Mortgage lenders will look at your credit record from Equifax or Trans Union and view your credit score to see how you have managed your debts. It will report debts for banks, retail stores, credit card companies, student loans, car loans, etc. Any bankruptcies or collection items will also appear.

Mortgage Credit Score - House in Brampton Ontario Canada You should review your credit report before applying for a loan.

Your Mortgage Medic can help you understand what your score level means, how your score compares to others, and how to improve your credit score.

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