Guide | Home Buying
What are Credit Scores?
Understanding credit scores is vital when it comes to getting a mortgage. Learn how this financial regulator helps people like you to purchase a home.
The credit scores most widely used in lending decisions are FICO® Scores, the credit scores created by Fair Isaac Corporation (FICO). Lenders can request FICO® Scores from all three major consumer reporting agencies, including TransUnion®, a leading global risk and information solutions provider that finds innovative ways to leverage data and information to help consumers and businesses make smarter decisions. Lenders use FICO® Scores to help them make billions of credit decisions every year. FICO® developed FICO® Scores, based solely on information in consumer credit files maintained at the consumer reporting agencies.
Understanding your credit score can help you better understand your credit risk and allow you to keep up your good financial habits. Your credit score is one of the most important factors that lenders consider in determining your eligibility for a home loan. It can also affect the terms, conditions and types of loans for which you may qualify. Vanderbilt partners with FICO® and TransUnion® to provide customers with their FICO® Score, in addition to other educational tools to help them stay informed and understand changes throughout the year. This information is provided to customers for no additional charge at https://www.vmf.com/fico-score.
Understanding how lenders utilize credit scores, as well as the benefits of maintaining a good score, can help you during the lending process.
How are they used?
During the loan process, lenders may obtain your FICO® Score to help them evaluate your credit history and creditworthiness. Scores can influence the lending decision, down payment requirement, eligibility for certain loan types, and interest rates.
What are the benefits?
Because lenders can access scores easily, credit decisions can often be made more quickly. Lenders have access to more precise and unbiased information that allows them to make better decisions. As a potential home buyer, knowing your credit score gives you the ability to stay on top of your financial health.
How can you get a good score?
Understanding your credit score is the first step. Timely bill payments are important. Taking on unnecessary debt can lower your FICO® Scores. It’s okay to request and check your own credit report.
To learn more about Vanderbilt’s FICO® Score Open Access program, visit https://www.vmf.com/fico-score/.
FICO® is a registered trademark of Fair Isaac Corporation in the United States and other countries. TransUnion® is the registered trademark of TransUnion LLC
Stay in the Know