What Is A Credit Score?
A credit score is a numerical value based on a variety of factors that represent your creditworthiness. This numerical value then gets used as a guide by lenders, including mortgage lenders, to determine the likelihood that you will pay back any loans, or credit that has been extended to you. There is a variety of ways to calculate credit scores in the United States. The three major credit bureaus that issue these scores are TransUnion, Experian, and Equifax. A FICO® score is the most widely known type of credit score and ranges between 300 and 850.
Your credit score is very important in determining your eligibility for a mortgage loan, but it is only one component in a mortgage application. TransUnion, Experian, and Equifax are required under The Fair Credit Reporting Act (FCRA) to provide consumers with a free copy of their credit report once every twelve months.