From RISMEDIA via Lowes -
Improve Your Credit Score Before Searching for a Home
By Paige Tepping
RISMEDIA, September 8, 2010--Many prospective homeowners find out the hard way the importance of a good credit score when they apply for a home mortgage, especially after the subprime loan crisis. If you are considering buying a home in the near future, it is a good idea to give your credit score a check-up and then take positive steps to improve your credit score if you find problems. Ideally, it is best to begin working on improving your credit score at least six months before you plan to start shopping for a home.
According to the experts at Buy-and-Sell-House-Fast.com, the following tips will help you improve your credit and should be taken before you begin your home search.
The first critical step in taking care of your credit is to check your credit report. Unfortunately, many people fail to take this all important first step. Instead, they wait until they have applied for a mortgage loan to find out from the lender that there are problems with their credit scores.
By checking your credit score before you apply for a mortgage loan, you gain the opportunity to find out if there are problems which you can correct and discrepancies that need to be removed. When you check your credit report, make sure you check all three of the national credit reporting agencies: Experian, Trans-Union and EquiFax.
Review your credit report carefully for items that may be erroneous. If you believe that an item on your credit report is reported in error, you have the right to contest it. To do so, you will need to contact the credit reporting agency and explain why you believe the item is inaccurate. Supporting documentation such as receipts and cancelled checks can help your claim. Alternatively, you can engage a credit report repair services firm to fix your credit report.
If there are derogatory items on your credit report that are accurate but which could cause problems in your loan application, you cannot have them removed; however, you can take positive steps to counteract them. In the event that you have missed payments in the past, take steps now to get your bills current. Even if it means tapping into money that you might be planning to use for a down payment, it is essential that you get your accounts current and keep them that way. Begin by immediately making your payments on time. There is nothing which can lower your credit score more quickly than late payments. Ideally, make an attempt to begin sending in your payments a few days ahead of time to make sure they arrive on time and you do not have any more late payments on your record. If necessary, begin taking advantage of electronic payments in order to make sure your payments are made on time. Over time, this can make significant difference.
Keep in mind that eradicating all of your credit balances is really not the solution. In fact, credit can be your friend when you are looking to make a big purchase such as a home. The key is to make sure your credit is positive, not negative. Toward that end, avoid actually closing out your accounts. Instead, make an effort to pay down your balances and keep them paid down well below the minimum or completely paid off, but do not close the account. When your lender runs your credit to make a decision on your mortgage application, he or she will want to see that you have had a long credit management history.
After reviewing your credit history, if you see that most, if not all of your credit cards are maxed out or nearly maxed out, it is time to sit down and plan an aggressive strategy for paying some of them down. One of the critical factors that often determine your ability to be approved for a mortgage loan is your debt to income ratio. In addition, high credit card balances can drag down your credit score. Therefore, it is important to look at paying off some of your balances.
It is generally better to begin with your highest-rate balances first. Many consumers are tempted to move around balances when they receive an offer from another bank that is good; however, before you do this, remember that the worst thing you can do when you are trying to make a major purchase is to open new accounts.
By following these guidelines, you can improve your credit score and improve your chances of being approved for your home mortgage loan.
Lowe's Customer Care(CON8) 1065 Curtis Bridge Rd. Wilkesboro, NC 28698.
© 2010 by Lowe's®. All rights reserved.
Showing posts with label FICO. Show all posts
Showing posts with label FICO. Show all posts
Wednesday, September 8, 2010
Monday, December 14, 2009
Your Credit Score
From Realty Times of December 14, 2009
2010 and Rebuilding or Protecting Your Credit Score by M. Anthony Carr
If the latest numbers on credit card delinquency is any indicator, U.S. consumers are starting to get a handle on their credit card debt. In the 3rd quarter of this year, according to data from TransUnion, a credit reporting agency, the delinquency rate dropped to 1.1 percent.
The Associated press reports: “The decline is significant because of its timing. Delinquency rates usually rise in the third quarter from the prior period as people spend on summer vacations and back-to-school shopping,” said Clifton O'Neal, a TransUnion spokesman.” How you handle your debt affects your credit score and rating, which is what affects your ability to get a loan to purchase a home. The good thing about credit scores is that they are merely a snapshot of your credit at a given time. Missed payments, high credit vs. limits, too much credit, et. al., can all be corrected and cleaned up and your credit score return to a new high level.
Tim McLaughlin, senior vice president of Weichert Financial Services, answers the question – what dings on your credit affect your score and why it seems all the good loans (low rates, low/zero point, and even product availability), seem to favor those with good credit.
The Fair Isaac Corporation maintains the most popularly used score (referred to as the FICO score) and it ranges from 300 to 850. They also have a great resource on how to understand the score: What I like about McLaughlin’s information from his Market Monitor newsletter is that he provides the number of points your score will drop or increase with these items in place or cleaned up.
“There are five major ‘dings’ that impact your DCS (Decision Credit Score, or FICO score) the most, some obvious, some not so obvious: Maxed out credit cards: Doesn’t seem like a big deal in the grand scheme of things, right? Oh, it is: a maxed out credit card can reduce your DCS anywhere from 10 to 45 points, according to Fair Isaacs, a hefty price to pay for accumulating debt.
30 Day late mortgage payment: In addition to the late fees, this occurrence adversely impacts your DCS by 60 to 110 points … a whopping impact for being late on your mortgage.
Debt settlement: Also known as debt arbitration or debt negotiation, it is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. The downside, a 45 to 125 point drop in your DCS.
Foreclosure: Unfortunately, an occurrence we are seeing far too often as of late. In addition to the event, it will reduce your DCS 85 to 160 points.
Bankruptcy: The event that would have the single biggest negative impact on your DCS, reducing your score 130 to 240 points; an almost irreparable event.”
FICO has its own web site dealing with the scoring prices and it’s a good starting place for those trying to repair their credit rating.
Here are the three credit reporting agencies that use the FICO score:
Equifax (www.equifax.com)
TransUnion (www.TransUnion.com)
Experian (www.Experian.com)
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Copyright © 2009 Realty Times. All Rights Reserved.
2010 and Rebuilding or Protecting Your Credit Score by M. Anthony Carr
If the latest numbers on credit card delinquency is any indicator, U.S. consumers are starting to get a handle on their credit card debt. In the 3rd quarter of this year, according to data from TransUnion, a credit reporting agency, the delinquency rate dropped to 1.1 percent.
The Associated press reports: “The decline is significant because of its timing. Delinquency rates usually rise in the third quarter from the prior period as people spend on summer vacations and back-to-school shopping,” said Clifton O'Neal, a TransUnion spokesman.” How you handle your debt affects your credit score and rating, which is what affects your ability to get a loan to purchase a home. The good thing about credit scores is that they are merely a snapshot of your credit at a given time. Missed payments, high credit vs. limits, too much credit, et. al., can all be corrected and cleaned up and your credit score return to a new high level.
Tim McLaughlin, senior vice president of Weichert Financial Services, answers the question – what dings on your credit affect your score and why it seems all the good loans (low rates, low/zero point, and even product availability), seem to favor those with good credit.
The Fair Isaac Corporation maintains the most popularly used score (referred to as the FICO score) and it ranges from 300 to 850. They also have a great resource on how to understand the score: What I like about McLaughlin’s information from his Market Monitor newsletter is that he provides the number of points your score will drop or increase with these items in place or cleaned up.
“There are five major ‘dings’ that impact your DCS (Decision Credit Score, or FICO score) the most, some obvious, some not so obvious: Maxed out credit cards: Doesn’t seem like a big deal in the grand scheme of things, right? Oh, it is: a maxed out credit card can reduce your DCS anywhere from 10 to 45 points, according to Fair Isaacs, a hefty price to pay for accumulating debt.
30 Day late mortgage payment: In addition to the late fees, this occurrence adversely impacts your DCS by 60 to 110 points … a whopping impact for being late on your mortgage.
Debt settlement: Also known as debt arbitration or debt negotiation, it is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. The downside, a 45 to 125 point drop in your DCS.
Foreclosure: Unfortunately, an occurrence we are seeing far too often as of late. In addition to the event, it will reduce your DCS 85 to 160 points.
Bankruptcy: The event that would have the single biggest negative impact on your DCS, reducing your score 130 to 240 points; an almost irreparable event.”
FICO has its own web site dealing with the scoring prices and it’s a good starting place for those trying to repair their credit rating.
Here are the three credit reporting agencies that use the FICO score:
Equifax (www.equifax.com)
TransUnion (www.TransUnion.com)
Experian (www.Experian.com)
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Copyright © 2009 Realty Times. All Rights Reserved.
Tuesday, March 17, 2009
FICO SCORES
There are recent reports that FHA has raised it's FICO score requirement from 540 to 580. It is even suggested it could go to 600 or more.
If you are in that region of FICO scores, it is suggested you act soon while you have the opportunity and before the bar is raised too high for you to qualify.
If you are in that region of FICO scores, it is suggested you act soon while you have the opportunity and before the bar is raised too high for you to qualify.
Thursday, August 9, 2007
FHA MORTGAGES UP IN 2007
The FHA mortgages of years past seemed out of date with all the new, clever, zero-down, ARM, and Interest Only products. Now a renewed vigor has entered the marketplace as folks shy away from many of the sparkly new approachs after watching the sub-prime lending market slowly disolve into non-existence.
Here is an article that highlights the features and requirements to use FHA to purchase your home.
FHA Mortgages Up
To use this 30 year, fixed rate option, you do need to have good credit and 3% down, but you do get protected against the very things that are causing your neighbors to abandon their dream homes.
Check both FHA and non-FHA loans to see which will best fit your particular needs.
Here is an article that highlights the features and requirements to use FHA to purchase your home.
To use this 30 year, fixed rate option, you do need to have good credit and 3% down, but you do get protected against the very things that are causing your neighbors to abandon their dream homes.
Check both FHA and non-FHA loans to see which will best fit your particular needs.
Sunday, July 1, 2007
TIME FOR YOUR ANNUAL CREDIT CHECKUP
If and when you even think about buying a home, you want to ensure your credit history is at it's best. Your FICO score will determine if you can qualify for a "conforming" loan, the industry, FNMA and FMAC, standard loan. More important for the long term, your FICO score will determine what rate of interest you will be paying for the next 30 years or so. The best interest rates are offered to those with scores in the 760 to 850 range (6.313% National Average on 7-1-07) to 6.819% (660 to 699 range) or 9.930% (500-579 range). If your FICO is less than 500, even renting could be a problem!
A free, one time a year, free credit report is available to you. This web site will also give you the opportunity, separate from the free report, for $7.95, to get a copy of your FICO score (Equifax Credit Reporting Service). The other 2 credit reporting services offer similar options. All three services (called a tri-merged report) are used by lenders so each must be corrected for any problems.
This is the web site for all three services, and you can get the free report from each:
If you find problems with your report, real or errors, there are options for improving and correcting these items. A good place to start is the FICO web site:
A free, one time a year, free credit report is available to you. This web site will also give you the opportunity, separate from the free report, for $7.95, to get a copy of your FICO score (Equifax Credit Reporting Service). The other 2 credit reporting services offer similar options. All three services (called a tri-merged report) are used by lenders so each must be corrected for any problems.
This is the web site for all three services, and you can get the free report from each:
If you find problems with your report, real or errors, there are options for improving and correcting these items. A good place to start is the FICO web site:
If you know there are problems with your credit history, get started now! You will wish later you had as you suffer the penalties and pain of trying to buy your home. Good luck!
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