Credit made simple.
Table of contents
Looking to improve your credit score? These credit-building tips could help you qualify for home financing. Join us on the path to homeownership!
Educate yourself with these credit report FAQs:
How is my credit score created?
Every time you pay off debt, you improve or maintain your credit score. Every time you make a late payment, your score takes a hit. Every transaction or missed transaction affects your score, from utilities to credit card payments. Major purchases, credit card applications and delinquent payments could hurt your score—be extra careful during the mortgage process.
What is FICO and the three Credit Bureaus?
FICO is the system used to gather credit information, while the three bureaus (TransUnion, Experian and Equifax) are the data resources lenders use to determine your creditworthiness.
Why are my credit scores slightly different?
Each bureau calculates your credit using slightly different methods. Some of your credit history may not be recorded by one or more bureaus, as lending institutions report to each one at separate times. For a mortgage approval, the median score of the three bureaus is used.
What credit score should I aim for?
The FICO system calculates credit scores on a scale of 300-850. At Guaranteed Rate, we require a minimum score of 620 for mortgage approval. A high score tells lenders you’re a sure thing—helping you secure a great home loan with a low interest rate.
Who are my creditors?
Any banks or lending institutions that have loaned you money. This can include anything from credit cards and utilities to car payments and student loans.
What does my terms and payment amount refer to?
This tells you your amount and how many months you’ll pay until the balance is zero. If the account is a credit card, it’s considered revolving debt. This means it’s ongoing and you might not see any number in the box.
What do the number of months revolving refer to?
The number of months your account has been open. Late payments made on the account will be shown here under 30, 60 or 90 days late.
6 Credit Dos and Don’ts:
- DO keep your credit card balances from running too high. Large amounts of outstanding debt can harm your score.
- DO set up payment reminders via email or text. A history of on-time payments is a surefire way to improve.
- DO target debts with the highest rates and the highest balances. Come up with a payment plan that fits your financial situation and takes aim at high-interest and high-balance debts to build your score.
- DON’T move debt around. Shifting funds is not a solution. Pay it off as soon as possible.
- DON’T open credit cards unless you actually need them. You could put your score in jeopardy.
- DON’T close credit cards you haven’t used to give your score a quick boost. Closing cards can actually have the opposite affect and lower your score.
Improve Your Score
The three credit bureaus—TransUnion, Experian and Equifax—calculate your credit score using a variety of elements. While their exact processes are kept secret, visit MyFICO.com to read about the 5 factors that are used to weigh your credit score.
This link does not imply any sponsorship, approval, endorsement or affiliation of MyFICO.com or products by FICO
Dispute Your Score
To correct errors on your credit report, contact the credit bureau that is showing inaccurate information. Whether you noticed an erroneous late payment or another account discrepancy, inaccurate or incorrect information on your credit report can hurt your score. Filing a dispute online usually requires less documentation since your account information is more accessible. Dispute your report with the appropriate bureau below:
Pull Your Score
Knowing your credit score is your first step to your home loan application. At Guaranteed Rate, we require a minimum score of 620 for mortgage approval. An excellent score means access to the lowest rates. If you’re unsure of your score, check it now. Pull your score now.
GUARANTEED RATE IS NOT A CREDIT REPAIR COMPANY, CREDIT REPORTING AGENCY, BROKER OR ADVISOR.
You acknowledge that Guaranteed Rate is not a credit repair company or similarly regulated organization under applicable laws, and does not provide credit repair services. Where available, recommendations, tips and education materials are provided to you at no additional charge, and for educational purposes only. The services are intended to provide you with general information and assist you with identifying your options. The information is provided only to enable you to make your own choices about your personal finance, and is not intended to provide, legal, tax or financial advice. We do not provide any services to repair or improve your credit profile or score, nor do we provide any representation that the information we provide will actually repair or improve your profile. Consult the services of a competent professional when you need any type of assistance.
You acknowledge that Guaranteed Rate is not a “consumer reporting agency” as that term is defined in the Fair Credit Reporting Act as amended.