Why is My Credit Score Different?

cushing-team-reno-credit-score-for-home-loan

As a mortgage lender here in Reno, the Cushing Team spends a lot of time sharing information that we hope prospective homeowners will find useful. Some of the most common advice to those gearing up for a home loan involves reviewing your credit score. This information is often widely accessible from different websites and even your own credit card company. But people are often surprised that the credit score their lender ultimately accesses as part of the home loan process isn’t the same as the number they’ve been seeing. Here’s why your credit score is different.

Industry Scores vs Educational Scores

It’s not that the scores you see on your credit card dashboard or a third-party site like Credit Karma, or even from the credit bureaus themselves are wrong. But the point of these scores is educational – they give you a useful perspective of your credit across a variety of products, like credit cards and auto loans.

When a mortgage company considers you for a loan, they’re looking at your credit history to determine the likelihood of default. In order to do so, they have to use a score that’s been developed specifically for mortgage loans. Some mortgage companies use proprietary scores they’ve developed for their own customers, but most lenders use what’s known as the FICO score. Still, even a site like myFICO.com could show you a different score than your lender will see. Sometimes, it can vary by a few points, and that could be enough to knock you out of qualifying for the best interest rate or even mean an application denial.

The Best Advice

At the very least, understanding that your credit score will likely vary somewhat from what your lender sees puts you in a position of knowledge. The same is true of keeping regular tabs on your score. If you notice big changes that don’t reflect reality, like a new car or line or credit, you’ll have time to investigate further and correct any errors. Ultimately, your credit score is based on your credit report. Check your score regularly – at least weekly – but remember that the numbers you see are primarily educational, and there are other factors that will factor heavily into a lender’s decision.

More questions? The Cushing Team in Reno is here to help. Contact us today with any questions about the mortgage loan process. We’re happy to share what we know.

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