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Mortgage And Credit Score

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But let's face it, the number of people who have perfect credit are far and few between. Most people have had a mark put on their credit report at one time or another. Some people have had a lot of marks put against them over the years. What can these people do as far as getting good mortgages?

One of the first things you should do before attempting to obtain any type of mortgage is to get your credit reports. There are three major credit reporting agencies, and, by law, you are entitled to a free copy from each one per year. Once you have these reports, you should sit down and carefully review each one to see if there are any mistakes or omissions.

If you find mistakes or omissions, you can write to the agency and request that your information be corrected. It is important to remember that each agency uses only its own information, which means that while one report may be entirely correct, the next may not. This is why you have to go over each one independently.

The reason you want to spend this time investigating your credit reports is because your credit scores are determined by the information on the reports. In order to be fair and accurate, credit scores are determined by set formulas that the agencies use. Erroneous information on your report will cause your scores to drop. This can be a problem when you are looking for mortgages or other types of loans.

In addition to helping you get the best mortgages, you can also help your other credit issues by correcting any mistakes that you find on your reports. Just about all lending agencies use these reports and scores in determining what type of credit and interest rates they will offer you. This includes such things as credit cards, gas cards, and even automobile insurance premiums. As you can see, your credit score can affect much more than just your mortgages.

Another benefit to reviewing your credit reports and credit scores prior to attempting to obtain mortgages is that you may discover that you are in bad shape as far as the numbers go. Some people simply have horrible credit histories and knowing if you fall into that category before you approach a bank or other type lender can be important.

It is important because with very poor marks on your history you may not get a loan at all or you may be offered a sub-prime loan which can become very expensive over time. Knowing, in advance, if you are subject to these types of offers can be helpful.

Sub-prime mortgages will usually carry a much higher interest rate than traditional fixed rate or ARM loans. The sub-prime market is a market into itself and you need to be very careful before entering into a loan of this nature. Many foreclosures take place within this particular market.

Mortgage And Credit Score

Your FICO score can range from 300 to 850. Lenders use these scores, along with other factors, to determine your credit worthiness. The higher the score the better chance you have of getting a loan. A higher score will also get you a better interest rate.

There are several factors that will affect your FICO score. Some are:

1.Length of credit history

2.Outstanding debt

3.Payment History

4.The amount of credit used verses credit available

5.Frequency of derogatory information

6.Severity of derogatory information

7.Number of inquires

8.Number of delinquencies

FICO scores are updated once a month, generally around the 21st through the 29th.

They are calculated on the previous month's activity. They can vary from agency to agency, depending on what that agency has on their file. Not all creditors report to all agencies. Some creditors don't report to any of them.

Your FICO score will change as your credit history changes. If your lender uses one agency to check your credit when you apply for a loan, then checks it with another later, that will make your score change. But, only within that lending institution.

Each creditor decides what range to use in considering who will be a good risk. They use your FICO score along with some or all of the above factors to determine your credit score to see:

*If you are a good credit risk

* How much and what type of interest you will pay

Check on your credit score often to make sure there's nothing going on that you don't know about. Some credit card companies have your FICO score on their website. If you pay your bill online, you can check on your score while you are there. That way you can keep a close eye on your score. Your credit score will vary some month to month but, not much. It shouldn't vary more than 5 or 6 points. If moves more than that find out why.

You are entitled to a free copy of your credit report once a year. You can also get a free report if:

1.You have been denied credit because of information on your report. (You have to request a copy within 60 days.)

2.You believe your report has errors stemming from fraud.

3.You receive public assistance.

4.You are unemployed and looking for work.

If you don't qualify for a free report, you can get one from any of the credit bureaus for a small fee. Contact information for the three reporting agencies is:

Equifax

P.O. Box 740241

Atlanta, GA 30374

Phone # 800.684.1111

http://www.equifax.com

TransUnion

P.O. Box 1000

Chester, PA 19022

Phone # 800.888.4213

http://www.yuc.com

Experian

P.O. Box 2104

Allen, TX 75013

Phone # 888.397.3742

http://www.experian.com

When contacting the credit bureau, you will need to provide them with the following information.

* Your full name. (including generations if any)

*Your spouse's name (if applicable)

*Your current address

*Your addresses for the last 5 years.

*Your birth date.

*Your social security number.

*Your phone number.

Copyright 2007 Robert Hughes

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Both Joseph Kenny & Robert Hughes are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Joseph Kenny has sinced written about articles on various topics from Credit Cards, Debt Consolidation and Credit Cards. Joe Kenny writes for Only Stop, search in the UK, visit them today for. Joseph Kenny's top article generates over 550000 views. to your Favourites.

Robert Hughes has sinced written about articles on various topics from Debt Reductions, Free Credit Report Score and Debts Loans. Robert Hughes received his degree in Accounting in 1979. Since that time he has helped several different companies grow. He is the owner and CEO of Hughes Network Marketing, LLC, which owns and operates several websites one of which is:. Robert Hughes's top article generates over 1600 views. to your Favourites.

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