When it comes to the home-buying process we get a lot of questions about credit scores and how they affect mortgage approval. Your credit score does have a lot to do with being approved to buy a home. And, it’s important to work with a high-quality mortgage broker that can walk you through the process and help you understand how your credit score plays a part.
At Edge Mortgage Inc., we aim to make this process as smooth and transparent as possible. Buying a home or refinancing your existing mortgage should not be expensive or difficult. Our team is committed to quality customer service by putting you first and will listen to and answer all of your questions. We provide our clients with the lowest interest rate possible and don’t have any hidden fees. Whether you prefer to do everything electronically or meet face to face, we will be there every step of the way.
APPLY FOR A MORTGAGE NOW
We know each client is unique and will help you find the loan to best fits your needs. You will find that the skill, professionalism, and consideration we give to each of our clients makes getting your loan a successful and positive experience. Let’s dive into understanding credit scores and why they matter when you’re applying for a mortgage.
The Role of Credit Scores in Mortgage Approval
Credit scores are crucial in the mortgage approval process. Lenders use these scores to assess your risk as a borrower. The higher your score, the better your chances of getting approved for a mortgage with favorable terms. When you start working with us at Edge Mortgage Inc., we typically begin with a soft credit pull.
Soft Credit Pulls and Their Benefits
You might wonder why we start with a soft credit pull. Here’s why:
- Avoiding Trigger Leads: A soft pull helps us avoid trigger leads from other lenders, meaning you won’t get bombarded with unsolicited offers.
- Protecting Your Score: Soft pulls do not affect your credit score, which is important because full credit reports are only valid for 120 days in mortgage applications.
Common Questions About Credit Scores
One of the most common comments we hear from clients is that the scores they see on Credit Karma or through their banks or credit cards are different from the scores we pull. Let’s clear up why this happens.
Credit Karma vs. Mortgage Credit Scores
When we pull your credit at Edge Mortgage Inc., we get a snapshot of where you are at that moment. Credit Karma and other services use different models to calculate your score, which can lead to discrepancies. These services provide a good forecast of your credit health but use models like VantageScore, whereas mortgage lenders typically use the FICO score model.
Understanding Different Credit Score Models
VantageScore vs. FICO
Both VantageScore and FICO are used to calculate credit scores, but they have different criteria and scoring methods. Mortgage lenders, including us at Edge Mortgage Inc., prefer FICO scores because they are specifically designed to predict the risk of lending money for a mortgage.
Why Scores Vary
Scores can vary based on the data used and the scoring model applied. It’s important to understand which model your lender uses and how it reflects your creditworthiness. Knowing this can help you better prepare for the mortgage application process.
Tips for Managing Your Credit Score for Mortgage Approval
Regularly Check Your Credit Reports
Make it a habit to check your credit reports regularly for any errors or inaccuracies. This proactive approach can help you catch issues early and correct them before they impact your mortgage application.
Improve Your Credit Score
Improving your credit score can significantly boost your chances of mortgage approval. Here are some tips:
- Pay Bills on Time: Late payments can negatively impact your score.
- Reduce Debt: Lowering your debt-to-income ratio makes you a more attractive borrower.
- Avoid New Credit Inquiries: Too many new credit inquiries can lower your score.
Work with Edge Mortgage Inc.
Understanding credit scores and how they affect your mortgage approval is essential for any homebuyer. By knowing the difference between soft and hard credit pulls, the various credit score models, and how to improve your score, you can be better prepared for your mortgage journey. At Edge Mortgage Inc., we’re here to help you navigate the complexities of credit scores and mortgage approvals. Our team is dedicated to providing personalized advice and support to ensure you understand every step of the process.
Ready to learn more about how to calculate income for a mortgage or have other mortgage-related questions? Contact Edge Mortgage Inc. today for personalized advice and assistance. We’re here to help you every step of the way!
Read some of our 5-star reviews from our happy clients
“Keri and her team were so incredible in helping my fiancé and I with the purchase of our new home and sell of our old home. We found out we needed to sell in order to purchase and she was able to get our loan process started within hours. Keri was always available when needed and was willing to answer any questions we had. She is very knowledgeable about the process of buying/selling a home from the financial side and is willing to explain anything! We will certainly be working with her again in the future and would recommend her to anyone!” -Hanna
“My husband and I used Keri’s services to refinance our home. Keri was extremely responsive and patient with answering all of our questions and helping us make the best decision for us. She provided great customer service, which is almost non-existent these days. The process was very easy. We were never left hanging wondering what was going on or what the next steps were. Keri was awesome to work with and worked hard for us. I would use her again and highly recommend her services.” -Melissa
APPLY FOR A MORTGAGE NOW
Edge Mortgage Inc. is your top-rated mortgage broker serving all of Colorado, Nebraska, Ohio, and Wyoming
Edge Mortgage Inc. is located in Johnstown, Colorado, and serves all of Ohio, Colorado, Wyoming, and Nebraska. We offer honest answers and a stress-free process and we have no hidden or extra fees, keeping more money in your pocket. We are your trusted mortgage broker and we are ready to serve you. Call us today at 970-744-0000.
You may also be interested in reading: What Are Closing Costs? Everything You Need to Know
