Estimated reading time: 3 minutes
When it comes to building your credit, it can feel like a lot to keep track of, especially if you’re unfamiliar with the language. To ensure you’re as confident as can be as you build your score, let’s go over some popular terms you should be aware of.
Your credit score is the numerical value of your credit. Your score is used to predict how likely you are to pay back a loan on time. Credit bureaus use a formula called a scoring model to create your score from the information gathered in your report. Since different bureaus and companies have different scoring models, each may have its own unique score.
A request to examine your credit file is called an inquiry. Generally, a credit inquiry falls into one of two types: hard pulls and soft pulls. Soft inquiries are common and do not change your credit score. Examples of this can be when you request your annual credit report or when you receive a credit card promotion in the mail. When a lender or company requests to review your credit report as part of the loan application process for a pre-approval, it’s known as a hard inquiry.
A credit report is a statement that includes information regarding your credit activity, late payments, usage, and current loan or credit situations. The state of your credit accounts and your recent loan paying history are available on your credit report.
By issuing a fraud alert on your credit, you are requiring creditors who check your report to take steps to verify your identity before opening a new account, issuing an additional card, or increasing the credit limit on an existing account. When you place a fraud alert on your credit report for one of the national credit reporting companies, they must notify the others.
Identity theft occurs when someone steals aspects of your identity to commit fraud. This often occurs by using your personal information without your permission, such as your name, Social Security number, and credit card information.
Identity theft services will monitor your personally identifiable information on websites, public records, social media networks, and other places online for any unusual activity that could be signs of identity theft.
Also known as a credit freeze, a security freeze prevents prospective creditors from accessing your credit file. This can stop identity thieves from being able to open new accounts in your name. While a freeze is in place, only a limited number of entities can access your information.
We can provide answers to your mortgage questions and needs! Although we aren’t credit experts, we can point you in the right direction for resources. When you’re ready to learn more about how we can help you achieve homeownership, contact us today!
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.