How do Credit Scores Work?

What is a Credit Score and How Does it Determine Whether You Get Approved or Not?

When you apply for a refinance, your credit score is more significant than your income and assets. Your credit score is the first criteria used to determine eligibility.

Your credit report provides lenders with an overview of your entire credit and payment history. This is extremely important because it gives lenders an idea of how you’ll manage your loan payments if approved.

How do mortgage lenders get this report? Three credit bureaus provide credit data; Experian, Equifax, and TransUnion. Whenever you make a payment or borrow money, your creditor alerts either one or all three of these administrations.

When you apply for a refinance, lenders will order a credit report, which will include information from all three bureaus. They will all generate a score based on the same scoring model.

Oftentimes, bureaus have different information reported to them, which can result in three different credit scores. Lenders will utilize the middle score to determine your eligibility.

What Affects Your Credit Score?

There are many factors that can affect how credit scores get populated. Two of the most important factors are payment habits and your balance-to-limit ratio.

Your payment habits within the last two years give your lender an insight on how well you manage your monthly bills which helps them determine whether you can qualify for a loan. Your balance-to-limit ratio shows how much debt you have in relation to how much credit you have available.

The most common example of this would be maxed-out credit cards; even if your bills are paid on time, you might still be overextended, which will lower your credit score.

At, we understand that life events can happen. Whether it’s the loss of a job, a sudden illness, or unforeseen medical bills, we strongly believe that everyone deserves a restart. We offer flexible programs to qualify those with lower credit scores who may have been denied by other lenders. Give Us a Call Today at (877) 342-0181 or Apply Online.