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Truths About Credit Scores Every Homeowner Should Know

FICO scores aren’t the only number when it comes to credit scores. Let’s review some of the truths about credit scores, so you’ll be able to put yourself in the best position if you need a loan or want to refinance your home.

Different Lenders Create Different Scores

Companies that produce FICO scores, the most widely accepted one, permit lenders to customize the systems they use to create scores. For example, a lender may weigh key factors more heavily than others. In addition, the big three credit reporting bureaus: Experian, Equifax and TransUnion, also create credit scores based on their individual formulas. Besides FICO, the three credit bureaus have their own scoring called VantageScore to compete with FICO. VantageScore is the score you’ll get from free credit reporting sites.

Key Factors Used in Determining Your Credit Score

According to Mortgage lenders in Denver, Gershman Mortgage, your credit score is typically determined using five key factors. Again, other factors and the weight of all factors differs for each lender and credit bureau.

As a homeowner, you may want to pull cash from your home to pay for expenses or make home improvements. Keep in mind these credit factors, so you can get the best interest rates to keep your loan affordable – you may even be able to lower your existing mortgage interest rate!

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