You sit down to look at your credit report for the first time. If you're scores are 750 or above, congratulations! You have excellent credit; stop worrying. If you're scores are not above 750, no problem-a journey of thousand steps begins with the first one. Take solace in the fact that the national average score is around 676 according to the Gallup Organization. If you're scores are below 400, 500, or 600, there's definitely room for improvement and only one way to go-up!
Debt Consolidation And Credit If the numbers I've mentioned don't make any sense to you or you have no idea what they mean, don't fret-I'll explain. Credit scores range from 300 to 850. All three of the credit bureaus-Equifax, Experian, and Transunion-offer FICO credit scores using a complex mathematical formula developed by Fair, Isaac and Company, but they each give the scores a different name: At Equifax, the FICO is known as the Beacon credit score; at TransUnion, it's called Empirica; and at Experian, it's called the Experian/Fair, Isaac Risk Model. All these scores are determined by several factors: the number and type of accounts you have, your bill-paying history, late payments, collections, outstanding debt, and the age of your accounts. The credit scoring system for each of the bureaus awards points for each "factor" and the total number-your credit score-is an indicator of how likely you are to repay a loan.
Check Credit Rating Here are a few quick tips to help improve your credit scores:
How To Improve Your Credit Score If you apply for mortgage finance, you do not know if you will get approved for the loan and what the percentage rate will be. Both of these depend on your credit score. The better you credit score is, the higher your chances of an approval at a low rate. Credit scores are based on the information in an individual's credit report. Lenders use credit scores to evaluate the potential risk posed by lending money to consumers
Improve Credit Rating · Pay your bills on time, especially your mortgage payment.
Because each bureau can and does receive information from different banks and creditors, your credit score (also referred to as "FICO score") can differ from credit bureau to credit bureau. While credit scores themselves range from 350 to 850, a FICO score of 700 from Experian is generally considered the equivalent of a 700 FICO score from Equifax or TransUnion. Regardless of which bureau supplies your credit report rating, the higher your FICO score, the better your chances are of securing a loan, with a favorable interest rate and ultimately having a stronger more solid credit history.
Credit Online Rating Report · Try to keep your outstanding debt low; don't max out your credit cards.
• Try not to exceed 30% of your credit card’s credit limit. Large credit balances can cause your credit score to drop. Credit scores are statistical scores based on your credit report that predict the probability of your defaulting on your credit obligation. A good credit score can be helpful to obtain more credit when you need it and at a lower interest rate.
Credit Score Rating Scale · Generally, the longer the credit history, the better the score.
Additionally credit scoring systems such as Fair Issac (FICO) did not treat authorized user accounts separately when computing the credit score, so the son or daughter would inherit, so to speak, the favorable credit history of the parent. The result could be that even kids with limited credit experience who were authorized users with good credit parents might now have a strong FICO score. Of course, the reverse was also true, and many authorized users could inherit the bad credit from the parent, lowering their score.
Bad Card Credit Credit People · Don't apply for too many credit cards or accounts at one time.
Free Credit Rating Report · Try not to have too many credit cards, having two to three is ideal.
Credit Rating Scale
If you're credit scores are above 750 you have excellent credit and will able to get the best interest rates and terms available. As your credit scores drop, the interest rate you'll receive for a home loan will rise: this is known as tiered pricing. The more of a risk the lender takes on you, the higher your interest rate will be. In addition, all lenders have their own break points between tiers. What this means is that one lender may raise the interest rate if a score drops below 700, while another lender won't give a higher rate until the score drops below 690. In summation, you should do everything in your power to maintain good credit scores, and be sure to shop around and do your homework when looking for a home loan because all lenders are not created equal, and not all lenders look at credit scores equally. Knowing that you have good credit scores is a start. Knowing what kinds of interest rates you can get with your credit scores is the next step.
Bad Credit Rating
Brian Daniel is a loan officer/marketing coordinator for Bend Mortgage Group Ltd. a mortgage company in Bend, Oregon. For more information or help with a Bend, Oregon home loan visit www.bendmortgagegroup.com
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