Most people know, even if only on a surface level, that credit scores hold quite a bit of importance when it comes to transacting real estate. It's true - credit scores are essential when it comes to getting a mortgage on your future home. Unfortunately, the credit score many think that they have may have little to no bearing for mortgage lenders.

Some consumers shop around for a good mortgage relying on a "credit score" that they have found online using a free credit score reader. Most of the time, these free credit scores are completely meaningless in the eyes of a lender (and now that credit score provider has your personal information on file.)

So, how do you find a score that is actually valid? Here are the basics.

Legitimate credit scoring products

• FICO Credit Score - from Fair Isaac Corporation/myfico.com (range 300-850)

90% of all lenders use the FICO score, and it is the ONLY score that Fannie Mae/Freddie Mac, the Federal Housing Agency, and the Veterans Affairs will accept in underwriting loans that they guarantee.

• Plus Score - from Experian (range 320-830)
• Trans Risk Score - from TransUnion (range 300-850)
• Equifax Credit Score - from Equifax (range 300-850)
• Vantage Score - from all three bureaus (two ranges: 300-850, 501-990)

These 4 are considered an example of a "consumer score" - these are NOT genuine FICO scores, and here's the real kicker - mortgage lenders won't use them.

Three credit bureaus work with with major financial institutions, professional organizations, comparison sites, personal finance businesses, clubs like Costco, AAA, Sam's Club, and more to entice consumers with a credit score which is, in almost all cases, not used by lenders. Their goal is to obtain fees from consumers (which are totally unnecessary).

Know your real score (and usable credit score for a mortgage)

Consumers have a legal right to access their annual credit report at no charge once a year from annualcreditreport.com. This is sponsored by Experian, Equifax, and TransUnion. However, these reports will provide all the basic consumer data without revealing a credit score.

Visit myfico.com if you have a need for a credit score which is actually used by mortgage lender. It costs $19.95 per bureau.

Questions? We're happy to help, or refer you to a source that can. Don't hesitate to send us an email or give us a call!