Posted by: Kristian Harris
There have always been 4 main pillars to mortgage lending:
Down Payment / Equity
Credit has always been the one area that stresses people out the most because of two simple factors….they don’t always understand it and they have no control over how it is reported! People control the property they buy, how much they have saved to put down towards the home and obviously how much they make, but credit, is always a mystery and the one component that clients worry about because until your credit is pulled you really don’t know what your “credit score” will be.
The GOOD NEWS…there are ways of knowing what your credit looks like and also how you can make it better:
The most important thing is to check your own credit, that’s right, you can do it yourself! You can go to and get a detailed summary of your financial information and credit history along with commentary and a beacon score if you wish (your beacon score is the industry term we use to refer to your credit score). It will cost you nothing to get your credit report if it’s sent by mail or picked up in person; as an alternate you can have your report and credit score emailed to you for approximately $20-25. A very important thing to remember is that if you inquire about your credit directly through Equifax it will NOT COUNT TOWARDS YOUR CREDIT SCORE, i.e., your credit score (or beacon) won’t go down at all.
Most people, don’t realize that every time you give someone consent to pull your credit score your score actually goes down.
Aside from periodically checking your credit thought Equifax, there are other things you can do to help ensure your credit remains strong:
PAY BILLS ON TIME…always pay your “minimum payment” on time if you can’t pay the whole amount off
DO NOT exceed credit limits – exceeding or being close to limits will quickly bring down your score
DO NOT apply for a lot of credit at once…spread out requests for a car lease, mortgage, lines of credit, etc.
DO NOT apply for “store credit” from retailers, even if it saves you money upfront on a purchase it will drag down your score. Store credit is viewed negatively by the credit bureau companies (i.e., Equifax, TransUnion) and their interest rates are in the high teens
DO NOT close credit cards you are not using, it is ok to have zero balances and even better if you use them periodically (even just small amounts)
Don’t let your “Credit Score” stress you out, understand how it works and know what you need to do to improve!