Home-buying credit myths
Myth #1: You need perfect credit to purchase a home.
Fact: It is true that an individual’s credit score has an impact on the mortgage loan approval process and ultimately the resulting interest rate. However, perfect credit is not needed to secure approval for a mortgage loan. While credit scores can range widely, the higher your credit score, the more options you will have to find a mortgage with favorable interest rates.
Myth #2: Lenders have free rein in sharing your personal credit information.
Fact: Not so. For a lender to share your information with an affiliate (any entity that is involved in making, holding or investing in bank loans or credit extensions), generally you must first give your permission. State and federal privacy laws are in place to help protect your personal information.
Myth #3: Lenders only use one scoring model that determines creditworthiness.
Fact: There are a number of credit-scoring models used to determine credit risk in today’s marketplace. For example, many lenders use the VantageScore® as one model for determining credit worthiness. While scoring models vary, many of the same factors influence your credit score, including your payment history and your level of debt.