When it comes to your credit, applying for a home loan is different than applying for just about any other type of consumer loan.
Since a mortgage loan is for a substantially larger amount and for a longer time frame there is more risk for the lender. Therefore, to qualify for a mortgage more information is required in the underwriting process than for a credit card or auto loan.
For example, when applying for a credit card or auto loan, your lender will most likely request a copy of your credit report from one of the nation’s three credit reporting agencies, and either approve or decline your loan request.
When you apply for a mortgage loan, it is a whole different ball game.
What is a Residential Mortgage Credit Report?
Also referred to as a RMCR and tri-merge, this report is a composite of merged information from the three major reporting agencies – Experian, Equifax and TransUnion. It basically puts a ton of information in an easy to read format for a lender. All scores in one place, all negative accounts in another, all positive accounts in yet another, etc.
Can pulling a RMCR lower your credit score?
Since this type of report is a hard pull, you may see a small dip in your credit score.
If you are contemplating buying a home the first step is to figure out where you are at RIGHT NOW!
Here are a few things you need to do:
- Get a copy of your credit report and make yourself comfortable with the information on your reports.
- Check for errors that could be dragging your score down.
- Do NOT make any major changes, like closing an account. It could send your score down.
If you need help improving your credit in order to buy a home, give me a call or email me today. I help clients with this type of repair work everyday, and know how to make good things happen!