Jun 18th, 2007
Mortgage brokers and FICO scores
Many people tend to think that all three credit scores from Experian, TransUnion, and Equifax all have to be above 700 in order to get the best rates on loans. Generally this thinking is correct, especially with auto financal loan companies who combine your scrores and average them. But, more often than not, most mortgage brokers will take your middle score and use that as the determining factor of what your rate will be on your mortgage when buying a property. What this means is that if you have FICO scores of 540, 789, and 810, many brokers will use the 789 score as your rate score, even though there is a huge drop to the third score. Great huh? Well, this can also work against you. Let’s say you have scores of 820, 550 and 530. Guess what? They are taking your 550 score and ignoring that 820 altogether.
It’s important to remember that some but not all brokers do business this way, and it has its advantages and disadvantages. But if you don’t have all three scores up to par you can find good brokers who will still give you a good loan rate based off of that middle score alone. Prioritizing your credit repair can be very important when a property purchase is near.
