Credit is a big deal when it comes to borrowing money for big purchases or investments, such as a home, car and education. Many people only have a basic knowledge of what credit is.
You may find yourself asking: what is a credit score? How does it influence my future plans? Is a credit report the same as a credit score? Well, we’re here to clear the air for you.
A credit score is a numerically expressed evaluation of your likelihood of default on a loan. All the components of your credit report are assigned a weighted value, and a mathematical algorithm is then applied to determine that credit score number. A higher credit score indicates a lower likelihood of default.
A credit report is a summary of your financial reliability. Basically, it’s your history of paying bills and debt back. Credit bureaus collect information on your financial history and provide this information for those who require to see this. Credit reports can include information, like how many credit accounts you have, how many loans you’ve taken out, payment history, collection actions for outstanding debt, how old your accounts are, and public records of any attempts to collect outstanding debt. When applying for a credit card, the card company will request a copy of your credit report from one of three major credit-reporting agencies.
If you have questions on what your credit score and credit report can do for you when it comes to getting a loan for a new home, reach out to Union Home Mortgage today!