Today's Grant Blog is written by guest blogger, Kevin Ruby, Vice President of Community Mortgage, a Grant Preferred Lender What is my credit score? That is one of the first questions to ask yourself when you are in the market to purchase anything on credit. Your credit score will directly affect the cost of whatever you are buying. It is especially important to have a good score when purchasing a home. The higher your credit score is the better your interest rate will be and that will reflect in your monthly payment. If your rate is better you will be able to afford a more expensive home. There are many options to obtain your credit scores online but those are usually worthless scores. There are many different “credit models” used depending on what you are trying to finance. The 3 major credit bureaus have “tweaked” the weight of certain types of debt to be industry specific. For instance,  if you are purchasing a car more weight may be placed on how well you have paid your car and other longer term installment debts. The same holds true for car insurance companies, home insurers, department store credit accounts, and, of course, mortgage lenders. If you are pulling your score by way of an online source you are more than likely not getting the score that will be used in purchasing your new car, new home, or insurance policies. Most mortgage lenders use scores from Equifax, Experian, and Trans Union. The Lender will take the middle of three scores and that will be the basis of everything that follows. If your score is higher, that shows that you can handle your debt in an acceptable manner. You don’t overuse credit cards by having them charged to the max and possible over the limit. You pay all installment debt on time and you probably have very little in the way of collections and judgments. There is a free way to access your credit file and just see what is being reported.  The three nationwide credit reporting companies have set up a central website, a toll-free number and a mailing address through which you can order your free annual report.  To order, visit www.annualcreditreport.com, call 1-877-322-8228 or complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service , PO Box 105281, Atlanta, GA  30348-5281. 

This will allow you to see what is being reported and to make necessary changes to your credit and just to be sure that items are being reported accurately. You will not get to see you credit score but you will be able to make sure that your credit is correct and looking as good as possible. You may see that you want to pay down your revolving accounts such as credit cards. Credit cards with a very low balance will, in many cases, raise your score several points.

My advice is to start up a relationship with a mortgage lender that you feel comfortable using and give them authorization to pull your credit. The lender can help you work through most of your questions and get you well on your way to a higher score.