Credit scores

Credit Score Range:

760-850 - EXCELLENT

700-759 - VERY GOOD

660-699 - GOOD

620-659 - AVERAGE

580-619 - POOR

500-579 - VERY POOR

DID YOU KNOW: YOU CAN GET A MORTGAGE WITH A CREDIT SCORE AS LOW AS 580?

Home Buying and Your Credit Rating

Now that you are interested in purchasing a home of your own, it is also a good time to review your credit report, checking closely for correctness. If you are married, you and your spouse will have separate credit files that contain much of the same information.

You need to have a good credit rating to buy a home,but it does not have to be perfect! They type of loan and amount of down payment will dictate what your credit score (FICO Score) needs to be. Your credit rating is the history of money you have borrowed and repaid. There are 40 FICO score reporting models. Mortgage FICO Scores are not the same as credit scores for a car loan.

It is important to have a good credit rating because your home mortgage lender will decide whether or not to approve your loan application primarily based on your credit rating. If you have not borrowed and repaid money, you will not have a credit history rating.

You may be able to show your ability to make timely payments using nontraditional credit references like rent, utilities,childcare, child support and other large recurring payments to show the lender that you make your payments on time.

What is my credit report and where do I get a copy?

A credit report is a current and historical record of your credit activities and employment. It also shows action taken against you because of unpaid accounts,bankruptcy, judgments, liens filed against you plus former addresses and employers. Here are the three major credit reporting agencies that lenders pay to obtain your credit information. You too can obtain a copy of your credit report.

Equifax
1-800-685-1111
www.equifax.com

Experian
1-888-397-3742
www.experian.com

Trans Union Corporation
1-800-888-4213
www.tuc.com

Visit www.AnnualCreditReport.com for information on how to obtain a FREE copy of your credit report.

Why should I obtain a copy of my credit report?

Avoid surprises! Errors on credit reports are not uncommon and they can be corrected by contacting the creditor. You can save time by reviewing your report for accuracy before you apply for a home loan.

What if I discover that I have a poor credit history?

If you have a poor credit history, consider contacting our favorite credit repair company www.CreditSecurityGroup.com No one can unconditionally guarantee to clean up your credit and that you will qualify for a loan. Under the Fair Credit Reporting Act, credit repair companies cannot do anything that you cannot do for yourself at little or no cost.

Although errors on your credit report can be corrected, a poor credit history cannot be erased. It is understanding how to help yourself and your credit that is important. Your credit report can be improved over time by doing the following:

  • Consistently pay your bills on time;
  • Keep your overall debt at a reasonable level, relative to your income;
  • Actively and responsibly use credit cards.

Interested in improving your credit scores?

One of our credit repair partners thought it would helpful to provide you with a list of things to avoid when trying to improve your credit scores. It is usually beneficial to try to avoid doing any of these 5 things: 

  1. Don't pay off collections or "Charge Offs". If you want to pay off old accounts, do it through escrow, making sure that the debt is yours. Request a "letter of deletion" from the creditor.
  2. Don't close credit card accounts or it may appear that your debt ratio has gone up. It also affects other factors in the score, including credit history.
  3. Don't max out or over charge credit card accounts. Keep your balances below 40% of their limit during the process. Pay down balances if possible.
  4. Don't consolidate your debt. When you consolidate all of your debt onto one or two credit cards, it will appear that you are "maxed out" on that card and you will be penalized.
  5. Don't do anything that will cause a red flag to be raised by the scoring system. This includes adding new accounts, co-signing on a loan or changing your name or address with the bureaus.

Please don't hesitate to reach out to one of our qualified Residential Mortgage Loan Originators if you have any questions or feel free request a Free Consultation below to get the conversation started.

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