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– When applying for a mortgage, your lender will look at both your credit report and credit score. While they are related, they are used for different purposes. Your credit report is an account of your credit history and activity. It includes current balances and payment history on things like credit cards and automobiles. It even details public records like bankruptcies. These files are maintained by the three credit reporting bureaus who use that information to give you a credit score. Your credit score, known as a FICO, is a numerical calculation based on an algorithm that measures the activity in your credit report. The higher your credit score the better. Each score from the bureaus may be slightly different, but there are five factors that affect your credit score to varying degrees. Payment history. Are you making your payments on time? Amount owed. The ratio of how much money you have borrowed versus the amount of total credit available to you. Credit history. The length of time you’ve had different lines of credit. Type of credit. Some credit is considered good debt while other types may be considered bad debt. Inquiries and new credit. Have you had any recent inquiries into your credit report that may indicate you are taking on additional debt? Mortgage lenders use your credit report and credit score to determine the potential risk to giving you a loan and even things like the interest rate you are offered. If you’ve applied for a loan and your credit has been pulled, your lender will provide you with your FICO scores. However, it’s important for you to monitor your report regularly for accuracy. Law requires that each of the bureaus provide a free copy of your credit report once every 12 months. Take advantage by going to annualcreditreport.com and get your copy from one of the three bureaus every four months. Happy house hunting!