Credit Score Basics

Why is my credit score important?

Your credit score plays a role in determining the interest rate and loan programs you are eligible for when taking out a mortgage loan. Typically a number between 300 and 850, your score represents the likelihood of you paying your debts on time. Higher credit scores often result in lower costs to borrow, meaning you’ll save more money on interest throughout the life of a loan or line of credit.

How is my credit score calculated?

Your credit score (or FICO score) is determined from your credit report. There are 5 categories that make up your score, and some are weighted more heavily, such as payment history and credit usage.

You may see variance in your score based on the credit reporting agency. This is normal. Different models (FICO, VantageScore, Equifax, etc.) evaluate different data points with different weights.

How can I improve my score?

The first step to improving your score is knowing your credit score. You can request and review your credit report once per year, for free, and without impacting your credit score, at AnnualCreditReport.com. Additionally, GreenState offers free credit monitoring tools for members within Online Banking. For more information and to enroll, visit GreenState.org.

Understanding and managing your credit score can make a difference in your financial future, whether that includes a home purchase or other loan type. If you have questions or would like to talk about your credit score and the minimum requirements for different mortgage loans, please feel free to contact me.

COMMON QUESTIONS

Q: How quickly can I close on my mortgage?
A: It typically takes 30-60 days to complete the necessary paperwork from application, to approval, to closing, but some purchases can take longer. If you have a specific timing need, please let me know as soon as possible and we’ll do what we can to accommodate .

Q: Do you have any summer maintenance tips?
A: Yes! Power washing your exterior home surfaces is a great summer task. Not only does it prepare your home for entertaining guests, but it also instantly improves curb appeal.