We have looked at Residential History and Employment/Income History.  The next installment is one of the most asked about and worried about when purchasing a home…..Credit History.  So without further delay let’s just jump right in and tackle it.  Once again some of this is very simple and straight forward but some of the information can be very helpful between you and your home buyer.

• What is a Credit Score?
  A credit score is a quick “snap shot” of any one’s personal credit risk.  This “snap shot” is for any given time.  Your credit score is also accumulative from the time you started using you purchasing power to the present.  It gives the lenders a very fast and objective measurement of what your credit risk is.
•  What is a Good Credit Score to have?
   A good score depends on the criteria of the credit product that you are looking to use.  A lender can advise you on what “range” that you would need.  But as for the scoring organizations, here are their numbers:
            Equifax 300-850
            Transunion 150-934
            Experian 330-830 
• How can I Raise My Credit Score?
  Paying your bills on time might seem easy but it is very important at raising your score over time.  Keep your balances low on your credit cards that have revolving credit.  Don’t apply for or open new credit accounts.  Only do this if you absolutely need to.  And on the other side don’t close unused credit cards.  It’s a funny thing.  By closing an unused credit card you have just eliminated some of your history.  So just leave well enough alone.
• What does a Credit Score Consider?
  Look at the graph below.  Credit is looked at what type, new accounts, length of credit history and the balances that are owed.

• What does a Credit Score Ignore?
  A credit score does not see race, color, religion, national origin, sex or marital status.  It also doesn’t see your age.  Thank goodness!!  Also your salary, occupation, title, employer, date employed or employment history never enters into your score.
  Where you live does not enter into your credit score.  The interest rates that are charged on your credit accounts have no bearing on your credit score.  If you have child support or rental agreements they are not seen.
  When you purchase a car or open an account your credit is only looked at.  This is only seen as proofing your credit.
• How can One make sure that Credit Scores be Accurate?      Order a copy from a credit agency authorized to provide credit reports to consumers.  One free credit report per year is allowed.  You can go to www.myFICO.com for more information.  Also you can contact each Credit Report Agencies directly:

                Equifax:  800-685-1111 or www.equifax.com 
              Experian:  888-397-3742 or www.experian.com 
           TransUnion:  800-888-4213 or www.transunion.com 

• In A Nutshell, What’s Important To Remember      About Credit?   
  1. Mortgage Loans Today Are Evaluated On a Case By Case Basis As a Package
  2. Higher Scores May Be Required For Particular Loan Programs
  3. Credit Reporting Errors Do Occur, and Take Time To Repair
  4. No Credit / No Credit Scores?
  5. Some Loan Programs Allow Alternate Credit Sources (Insurance Payments, Utility Payments, Phone Payments, Personal Loans Made to Uncle Phil)
  6. Get Some Credit!!

    Next time we will be looking Assets. 

    What DO you have that counts? 

This entry was posted on Friday, February 23rd, 2007 at 6:54 pm and is filed under Real Estate Books, Virtual Assistant Websites. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.