Credit scoring
is a statistical method that lenders use to quickly and objectively assess the
credit risk of a loan applicant. The score is a number that rates the
likelihood you will pay back a loan. Scores range from 350
(high risk) to 950 (low risk). There are a few types of credit scores;
the most widely used are FICO? scores, which were
developed by Fair Isaac & Company, Inc. for each of the credit reporting
agencies.
Credit scores only consider the information contained in your credit profile.
They do not consider your income, savings, down payment amount, or demographic
factors like gender, race, nationality or marital status. Past delinquencies,
derogatory payment behavior, current debt level, length of credit history,
types of credit and number of inquiries are all considered in credit scores.
Your score considers both positive and negative information in your credit
report. Late payments will lower your score, but establishing or
re-establishing a good track record of making payments on time will raise your
score. Vacation homes by the water. Call Dale or Cathy for Pinehurst Luxury condos
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• 35% - Previous
credit performance (specific to your payment history)
• 30% - Current level of indebtedness (current balance compared to high credit)
• 15% - Time credit has been in use (opening date)
• 15% - Types of credit available (installment loans, revolving and debit
accounts)
• 5% - Pursuit of new credit (number of inquiries)
The most important factor for a good credit score is paying your bills on time.
Even if the debt you owe is a small amount, it is crucial that you make
payments on time. In addition, you may want to: keep balances low on credit
cards and other "revolving credit;" apply for and open new credit
accounts only as needed; and pay off debt rather than moving it around. Also
don't close unused cards as a short-term strategy to raise your score. Owing
the same amount but having fewer open accounts may lower your score.
Recent changes minimize the negative effects that rate shopping can have on a
mortgage applicant. If there is a consumer originated inquiry within the past
365 days from mortgage or auto related industries, these inquiries are ignored
for scoring purposes for the first 30 calendar days; then, multiple inquiries
within the next 14 days are counted as one. Each inquiry will still appear on
the credit report.
Every score is accompanied by a maximum of four reason codes. Reason codes
identify the most significant reason that you did not score higher. The reason
codes can help a lender describe the reasons for higher than expected rates or
loan denial. Scores are not part of the credit profile and are not covered by
the Fair Credit Reporting Act. Pinehurst water front homes.
Your credit report must contain at least one account which has been open for
six months or greater, and at least one account that has been updated in the
past six months for you to get a credit score. This ensures that there is
enough information in your report to generate an accurate score. If you do not
meet the minimum criteria for getting a score, you may need to establish a
credit history prior to applying for a mortgage. Call Dale for
By law you can
order your credit reports at least once a year for FREE. This will allow you to see exactly
what's being reported about you by the credit bureaus.
EQUIFAX INFORMATION SERVICES, LLC
P.O. Box 740256
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TRANS-UNION, LLC
Post Office
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EXPERIAN INFORMATION SOLUTIONS, INC.
National Consumer Assistance Center
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Coldwell Banker United Realty
Dale
Heck – Realtor/Broker
910-528-4652
Cathy Bason – Realtor/Broker
910-528-5244