When you apply for a home loan or refinance, one of the first things that typically occurs is your mortgage professional runs your credit report and FICO^® scores. It’s important to understand that you have three separate FICO^® scores (one for each repository – Experian, Trans Union and Equifax.) Your three FICO^® scores are almost always different, it’s very common to have a 20+ point difference between your scores.  These scores largely determine your loan eligibility, lending parameters such as LTV (loan to value ratio which limits how much money you can borrow) and costs including interest rate and fees.

Most lenders use your middle FICO^® score when determining your loan eligibility and costs. Even the smallest difference in your credit scores can have a dramatic impact on the cost of your home loan. If your existing middle FICO^® score is as little as one point below the minimum requirement, you can be forced into a lower loan program involving higher fees and interest rates.

There are easy solutions available that can increase your FICO^® scores, allowing you to qualify for the best lending program possible. In many cases it can be as simple as a single phone call. Your loan officer should be able to explain your FICO^® scores, identify opportunities to obtain better rates and terms and provide you the exact steps required to improve your score (usually within 72 hours.)