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Credit Scores and Mortgages in Austin, Texas

Your Credit Score is the Most Important Factor When Getting a Mortgage in Austin

In this video, ASC's Ellie Evans talks with Branch Manager of Central Texas Mortgage Corporation, Mark Hairston, about how credit scores affect the mortgage you get. After watching, read on for more information about credit scores and mortgages in Austin.

What’s your score?? Undoubtedly, your credit is the single most important factor in determing not only your loan options, but ultimately the rate and terms that you will pay. By definition, a credit score is:

“A stastical model that evaluates and compares credit data from millions of consumers, which in turn applied mathematical formulas to determine whether or not a consumer will default on their loan obligation in the future”

Simply put – the better your score, the better the deal! Mortgage lenders use a “tri-merge” report which is actually 3 separate reports (one from each of the major credit bureaus – Equifax, Experian, and TransUnion) wrapped up into one big report. If you don’t already have a copy of your credit report (go to www.myfreecreditreport.com), your lender can provide you a copy. Be wary of lenders who “charge” for this service.

Tip! Find one that will run it for free. Once you receive your credit report, review it and ask your self:

1. Is my personal information correct?
2. Is my name spelled correctly
3. Are my Social Security number and date of birth correct?
4. Are the balances on my accounts accurate?
5. Are there any accounts that I didn’t open, or that I didn’t know about? (Identity theft is one of that fastest growing crimes in the country)
6. Are there any negative reports that I can potentially remedy?
7. Have any unauthorized credit inquiries been run?
8. Is there anything incorrect in the public records section, like liens or bankruptcies.

Although the precise formulas used to calculate scores remain a secret and there are no “magic bullets” for improving your score, a qualified Mortgage professional should be able to advise you on ways to improve your “score” to insure you get absolutely the best loan product you can.

Be Prepared! Here are a few “hints” to improve your score are the following:

1. Fix errors on the report
2. Get current on any past-due bills
3. Make all future payments on time
4. Pay down credit balances to 40% of available credit limit
5. Don’t open new lines of credit (unless you don’t have any credit)
6. Don’t close accounts when paid off (use sparingly)

If you want to order a report with a credit score, contact each credit bureau directly (see the information below), or visit www.myfico.com to order all 3 reports (with scores) at once. This site also has a great “Credit Education” section tat features a wealth of free information about credit and credit scoring.

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