Want a Mortgage? Make Sure You Have Good Credit Scores!

There are so many ads about credit scores and making sure you get your credit report to see what is happening on your report to make sure that you are not the victim of identity theft. Commercials sing (literally) the praises of free credit report.com and bemoan the fact that the singer did not check out his fiancé’s credit rating before getting married. Now he is living in his in laws’ basement and working at the local fish restaurant because of his poor credit scores.

How can you get a copy of your credit scores? FreeCreditReport.com offers you a report if you sign up for their monitoring service bong da truc tiep . The only problem with their report is that it is an average of the three reporting bureaus’ scores and will not tell you the specifics you need to have in order to dispute any inaccurate information. Also, they do not give you any information as to what constitutes good credit scores.

Good credit scores historically have been around 620-650 (scores range from 350-900 on the FICO range). Anything below 620 was considered poor and needed more documentation to be considered for an FHA or HUD loan. This was considered the sub prime market and was part of the bubble that was created when the real estate market started giving loans to anyone who could breathe without help.

Another issue in determining just what good credit scores are is the fact that there are three national credit bureaus that all have different math algorithms they use to calculate their score. You will statistically never be able to have the same score from one bureau to the next and that is why many mortgage lenders would base their approval on where your “middle” credit score is at the time of application. It would not matter if your highest credit score was well over 700 if the middle score did not meet the minimum for approval you would not get the loan without some additional work.

I am really going to date myself but I remember when we took a loan application, and asked the borrower, “How’s your credit?’ They would tell us I few late payments here and there. I’d ask if there were any late mortgage payments, (the kiss of death back then) any bankruptcies, no. Then I was good to go.

I would write the loan, and then order a credit report. I would have to wait for it to arrive snail mail! Then they invented a machine that the credit bureaus would set up in your office and they would send your credit reports over this machine. It would take 24-48 hours. We thought this was great! No scores, just a borrowers credit would show up. The borrower would then be asked to write a letter of explanation for any late payments, judgments, or inquires on their report.

An underwriter would weigh all things out and determine borrowers credit worthiness. Were they one-time events that were isolated issues, or was there a pattern of historical late payments? It was a human’s decision to determine the borrower’s risk factor not a machine.

Not any more, Fair Isaac Company, designed the formula used to determine a borrowers credit score. Which is where the term FICO score originated. They will not give out the exact formula used due to fear of manipulation of the system, but we do know, age, length of time on a job, the type of job, banking status (checking or savings accounts), length living in home, and credit history along with inquires into your credit all effect your score.

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