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Understanding credit score/qualifying news mortgage loans

Understanding the credit score system

 

The best-known and most widely used credit score model in the United States is the Fair Isaac Corporation (FICO) score and is calculated statistically with information from a consumer’s credit files.

It provides a snapshot of risk that banks and other institutions use to help make lending decisions. Applicants with higher FICO scores may be offered better interest rates on mortgage or automobile loans.

Visit annualcreditreport.com. This is the only authorized online source for totally free credit reports.

By federal law, you are entitled to a free credit report once every 12 months. This site gathers your information from each of the three nationwide consumer credit reporting companies: Equifax, Experian and Transunion. Check your report and look for any misinformation. If you find an error, you should address and correct it right away with the individual credit bureaus.

Take these steps to improve your credit score:

•Always pay all bills on time, even if it means making only the minimum amount due. Your payment history counts for 35% of your FICO score, the most heavily weighted category.

•Pay down your outstanding debt. Lenders look at the amount you owe verses your credit limit on charge cards. If the amount you owe is close to the limit the company has set, it is likely to have a negative effect on your score. You can also ask for a higher line of credit to change the ratio, but don’t be tempted to increase your outstanding balance.

•Don’t start applying for more credit cards or other types of loans while you are house hunting.

Find out how to get Pre-qualified for a mortgage. 
How to judge if mortgage refinance make sense? 

Start the Home Loan Process

Here are the main credit bureaus: 

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
1-800-685-1111
www.equifax.com

Experian
P.O. Box 9556
Allen, TX 75013
1-888-397-3742
www.experian.com

Transunion Consumer relations
P.O. Box 2000
Chester, Pa 19022-2000
1-800-916-8800
www.transunion.com

Dan Parisi(DRE 01923081 NMLS 997987) is a knowledgeable mortgage professional. Call of email him for mortgage information.

 

Contact Dan Parisi for your mortgage questions

 

 

 

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