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DHI MORTGAGE
UNDERSTANDING CREDIT
Credit can be complex, but understanding it can play a big role in becoming a successful homeowner. We are committed to providing you with the resources and guidance you need to better understand this important piece of homeownership.
Credit Scores and Credit Reporting
Credit certainly plays a big role in the home buying process. However, a strong credit profile means more than a loan approval. And credit challenges don’t necessarily mean you will never qualify for a home. Building good credit not only means qualifying for a loan, it can also mean lower interest rates, more purchasing power and better financing options, helping you save money and build a financial future. Who wouldn’t want that?
 
So what is credit scoring? This is a system creditors use to help determine whether it’s a good idea to give you a loan or credit. It can also be used to help decide the terms or rate you are offered.
 
How is your score determined? Information about you and your credit experiences, like your bill-paying history, the number and type of accounts you have, whether you pay your bills by the date they’re due, amount of outstanding debt, for example, is collected from your credit report. Using a statistical program, your information is compared to the loan repayment history of other consumers with similar profiles. For example, a credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points — a credit score — helps predict how likely it is that you will repay a loan and make the payments on time. This is also known as your credit worthiness.
 
Is your credit report as important as my credit score? Yes! Your credit report is a key part of many credit scoring systems. That’s why it is critical to make sure your credit report is accurate. Federal law gives you the right to get a free copy of your credit reports from each of the three national credit reporting companies once every 12 months. Make sure you are checking it! Keep in mind that a credit report and a credit score are two different things. Credit reporting agencies are allowed to charge you a reasonable fee for your credit score, but when you buy your score, you often get information on how you can improve it. That’s helpful! For more information about requesting your credit report and score visit www.annualcreditreport.com.
 
Are you ready to buy a home, but need help improving you credit profile first? Contact your Mortgage Loan Originator or visit our DHI Mortgage Home Buyers Club page. We offer services to help you get on the path to successful homeownership!
 
Ask people to share their home-buying fears, and you might get a second-hand narrative about a mortgage myth.
 
And, it’s totally understandable. You’re about to make a major life decision. Not to mention putting your own personal finances at stake. The point is: this type of investment comes with a list of mounting pressures and insecurities.
Document Library
Looking for a quick reference guide? Visit our document library for PDF resources that can be printed or saved for future reference. We have resources on a variety of credit related topics that may help you in your homeownership or credit improvement journey. Are you looking for more general information about home buying? Visit our Homebuyer Education page and document library.