There are several ways you can check your credit score, and you should get into the habit of monitoring it regularly-especially if you have a big purchase on the horizon. “While implementing the newer credit score models is a significant change that will take time and require close coordination across the industry, the models bring improved accuracy and a more inclusive approach to evaluating borrowers.” 3 easy ways to check your credit score “Today’s decision will benefit borrowers and the Enterprises, along with maintaining safety and soundness,” said FHFA director Sandra L. This more robust credit-scoring model could help create an easier path to homeownership. The hope is that potential homebuyers, across income levels and races, should have better access to mortgage products.Ī 2021 report by the Urban Institute found that Black and Hispanic Americans are more likely to have no or low credit and are more likely to be renters. Ideally, these new credit scoring models will help even the playing field for borrowers with thinner credit profiles. Your credit score plays a huge role in your ability to secure a mortgage and favorable terms like a low interest rate. What does this change mean for homebuyers? Maintaining a good credit score across both scoring models will require you to practice positive credit habits like making on-time payments, keeping your credit utilization under 30% of your available credit, and being selective about new credit applications.
However, each scoring model assigns slightly different weights to these factors when calculating your overall score. The higher your score, the better.īoth scoring models consider factors like payment history, amounts owed, how much credit you’re using, new credit inquiries, and credit mix.
FICO categorizes credit scores from poor to exceptional, with scores above 670 considered “good” and scores below 580 considered “poor.” VantageScore credit scores can fall within a few different categories, ranging from subprime (300–600) to superprime (781–850).
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