When looking for a loan many people ask about the rate and the payment. These are good questions but the lender has to have a lot of information these days before he can answer those questions accurately. If you don’t want him to pull your credit then he will have to assume a lot of different things.

Here is what the lender wants to see on your credit report. First of all, your credit score is like a snapshot of how you have handled credit and it is an important factor in judging the amount of risk involved in giving you a loan. Credit scores include information like how much credit has already been extended to you and what your balances and payments are on your outstanding debt. It also tells us if you have any current or prior collections, judgments or bankruptcies.

Sometimes people say they know what their score is. Well, if you went to an online site and got your score then you need to know that the mortgage world has a different scoring system and it is usually stricter. If your credit score is marginal then it can make a huge difference. Here is an example of a marginal customer I got yesterday. My lenders want a 640 middle score and he has a 652 on his own report. However, when I pulled his score, I got a middle of 636. This will have a huge difference on what rate and payment he will get.

Exp – My customer got a score of 571 and I got a score of 636. A 65 point difference.

Tran – My customer got a score of 652 and I got a score of 633. A 19 point difference.

Equ – My customer got a score of 702 and I got a score of 651. A 51 point difference.

These differences mean that lenders can’t simply rely on any credit scores you provide them with. They need to go and pull the credit themselves to see what numbers they are provided with.  The good news is that when I pull your credit, I can use that same report with any number of lenders and the score is good for 90 days.

Curious as to how credit inquiries affect your credit score?

Jay A. Kumar

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