 |
|
|
|
|
|
Scoring your Mortgage
Released May 2004
The Experian mortgage study was based on a nationwide sampling of three million consumer profiles.
Findings:
- The average Experian PLUS ScoreSM for consumers with at least one open mortgage is 716 versus 667 for consumers who do not have an open mortgage.
- The average mortgage amount is approximately $136,000 for U.S. consumers, with only 10% of consumer mortgages exceeding $250,000.
- Throughout the year, the average number of credit inquiries for home loans is highest in the month of July.
Consumer information on credit scores and mortgages:
Whether you are applying for a new mortgage, refinancing a current mortgage, or taking out a home equity line of credit, your credit history plays a significant role in the approval, rates, and terms of your new financial accountability.
Lenders use credit scores, which are generated based on the information in your credit report to evaluate your creditworthiness. They also examine other factors such as salary and employment to help them determine the terms and rates of your loan should they choose to extend a mortgage to you.
It is also important to note that the process of looking for the right loan may affect your credit score. When lenders check your credit, an inquiry is placed on your report. Generally, too many inquiries on your report may be viewed by lenders as negative. However, many scoring models will take into account that a consumer may be shopping for the best rates and count multiple inquiries for a specific purpose, such as a home loan, within a certain time period as only one inquiry.
Since most mortgages are large loans, having a mortgage account can be an important part of your credit history. While each lender has their own way of looking at your credit history, an open, current mortgage account generally improves your credit score. This is because the existence of a mortgage account shows potential lenders that you have been considered creditworthy in the past, and therefore indicates you are likely to be responsible in handling future financial responsibilities.
Once you’ve obtained a mortgage loan, making your mortgage payment on time every month will help you build a strong payment history, which will positively affect your credit score overall. In addition, you have the benefit of building equity in your home as you make payments toward your principle balance.
Remember, if you have a high credit score, you usually will be offered better rates and terms on your mortgage. That’s another reason why it’s important to take good care of your credit.
For more information about this and other credit score studies, please contact Experian Media Relations at (714) 830-5300.
|
|
 |
 |
|
|
|
|
|
|
|
|
|
|