Let’s play a game: what’s higher, gas prices or your credit score? 🤔📈 Better yet, who’s higher, your credit score or Snoop Dogg after hitting some of Martha Stewart’s home grown goodies? 😏🍃
While you’re thinking that over, the big wigs over in mortgage land are looking at new ways to size up lenders. Want the scoop? Keep scrolling! 👇
Here’s Five Fast Facts mortgages and credit scores:
- 🧮 Settle the Score - The way mortgage lenders look at credit scores is starting to change. New systems like VantageScore 4.0 and FICO 10T don’t just look at your score today, they look at how you’ve handled debt over time. That means your long-term habits matter more, not just one snapshot of your credit.
- 🏠 Loan Sweet Loan - The new credit score rules could affect a lot of home buyers. Big mortgage organizations like Fannie Mae and Freddie Mac are already starting to use newer scoring systems that look at more than just your current credit score. That may help some people qualify for loans more easily.
- 💸 Right On Time - One of the biggest changes is what counts toward your score. Newer models may factor in things like rent and utility payments, which could help people who don’t use many credit cards or loans. However, that information usually only shows up if consumers choose to have it reported.
- 🫡 Reporting for Duty - There are a few ways renters can get their payments counted toward their credit history. Some property managers already report rent data, while other renters can pay for services that do it for them. Still, only a relatively small percentage of renters currently have that information showing up in their credit reports.
- 📊 Trendy Wendy - Another big shift is the use of “trended data.” Rather than relying on a snapshot of your finances, newer models look at how you’ve managed debt over the past 24 months. This gives lenders more insight into whether you consistently pay down balances or tend to carry debt.
🔥Bottom line: If you’re planning on buying a home soon, these new credit rules could play out in your favor! While you’re checking on your credit report, keep an eye out for suspicious activity. Scams are on the rise and crooks are sneakier than ever. In this article, we walk through the latest tricks up their sleeves.
Shopping around for a mortgage?
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