Credit Scores and Mortgages: What to Check Before Applying

The score shown in a credit-monitoring app may differ from the score used for a mortgage. Understanding that difference, and reviewing the information behind it, can make a conversation with a lender more useful.

Why scores can differ

You have more than one credit score. The result depends on the scoring model, the credit-report information used, and when it was calculated. The Consumer Financial Protection Bureau’s credit-score explanation describes those differences.

Ask a prospective lender what information it will review and whether an initial inquiry affects your credit. An app’s score range should not be treated as either a mortgage approval or a rejection.

Review the reports behind the score

Read your credit reports for accounts you do not recognize, payment information that appears incorrect, and other errors. Keep records that support any correction request.

The CFPB explains how to dispute credit-report errors with the reporting company and the business that supplied the information. A dispute should address inaccurate information; it does not guarantee the removal of accurate negative history.

Allow time for the process. Do not plan a closing around a promised score increase or a fixed credit-repair timetable.

Look beyond the score

Mortgage qualification also involves the proposed loan, documented income, existing debts, available funds, and the property. Ask the lender to identify which requirements are met and which remain unresolved.

If one program does not fit, ask whether another option is appropriate and how its costs differ. Different terms can affect both the upfront cash and monthly payment. The goal is a workable loan, not simply the first approval offered.

Make changes deliberately

On-time payments, manageable balances, and applying only for needed credit are among the practices covered in the CFPB’s guide to maintaining credit.

Before opening or closing accounts, moving debt, or making a large financed purchase during a mortgage application, discuss the effect with the lender. A general internet tip may not fit the account history or loan process in front of you.

You do not need to carry interest-bearing credit-card debt simply to have a credit score. Be cautious of services promising a particular result or guaranteed mortgage approval.

Prepare questions for the lender

• What information do you need to assess my application?
• Which credit report or score will be used for the loan being considered?
• Are there report errors I should address first?
• What other factors affect qualification or pricing?
• If I wait before applying, what specific information should we review again?

Alta’s financing page provides a starting point for lender conversations. When you have an estimated budget, compare the currently available homes and request a loan estimate tied to an actual property. Neither the home search nor this article replaces the lender’s review.