Your track record with managing credit is a key component to granting you a mortgage loan. Therefore, any mortgage lender will obtain a credit report as part of the qualifying process. The credit bureaus will report:

• What and how much credit you use (credit cards, auto loans, mortgage, etc.)
• How long you've had the accounts
• How promptly you've made the payments

Gilpin uses three primary credit sources:

• TransUnion
• Equifax
• Experian

Gilpin obtains a "merged" credit report for all our applicants. Therefore, we review credit information from all three bureaus.

Your Loan Officer should ask your permission (and secure social security number information) very early on in the process to avoid delays in securing a loan.

Credit bureaus assign a "credit score" to each individual. Your "score" is just one of many factors (including income, collateral and debts) we consider when issuing a decision on a mortgage loan. Credit scoring was developed as a factual and objective way to determine the probability of the typical person repaying a loan as agreed. A credit score is determined by such things as:

• If you've paid bills on time
• How much available credit do you have?
• How many inquiries have you had to obtain credit?
• How recently were those inquiries made?
• Do you have any judgments against you?
• Have you declared bankruptcy in the past?
• How long has the credit been established?

All these things, among others, are assigned a numerical "grade" that is factored into your credit score.

Rest assured that only factual, numeric information is utilized here. Your personal profile, i.e., your sex, age, race, religion, etc. are not considered in anyway in your credit score.

Credit scores range from approximately 300 to 900. The higher your score, the better risk you are (based on scoring models) to repay your loan as agreed. Again, a credit score is only one factor in determining if you will be approved for a loan. Depending on your score, the rate and programs available to you may vary.

This is only a brief overview of how credit scoring works. Please keep in mind the following and speak to your Loan Officer for further information:

Your credit report can be corrected if misinformation is found. Keep in mind that correcting inaccurate information may take as much as 90-days to show up on your credit report.If you have "credit blemishes" you can pay off aged accounts, but only time will improve your credit score. Be aware that bringing accounts current will not immediately change your credit score. It will require time and patience. Talk to your Loan Officer who can assist you with correcting and/or improving your credit history.

To avoid a low credit score:

• Pay your bills on time.
• Don't have too many credit cards. Only open credit cards that you absolutely need. If you are in the midst of the mortgage process, speak to your loan officer before opening or closing any credit card accounts.

To add to the confusion, what if you have no credit established? If you always pay cash? Speak to your Loan Officer about documenting alternative credit references, such as the power company, your landlord, the telephone company, etc. In most cases the alternative credit report is acceptable if you do not receive a score from each of the three bureaus.