“We’ll pull your credit.” is the bland phrase you might hear from a lender. What does that mean?
Three companies — Experian, TransUnion and Equifax — maintain records of people’s debts and payments. They issue a ‘credit score’ for you, based on this data.
From a lender’s perspective, the credit score provides a consistent measure to assess the possibility of a borrower defaulting on a loan.
Your credit score can directly affect qualifying for a loan, rate and other terms. The better your score, the better your borrowing situation. A good credit score saves you money, which can help you maintain a good credit score.
It’s worth checking your credit score regularly, but particularly before a big transaction like a mortgage. If there are issues, start addressing them early.
This video may help you understand the score; look for other videos here on credit scores and credit history for more.