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Credit Scores and How They Affect You
More Resources:
What is a "credit score"?
Credit scores were developed by the credit reporting agencies in an attempt to streamline the
lending process. The score is supposed to be predictive of borrower's ability to repay the loan.
The lending industry has been forced by FNMA and FMLHC to accept the scoring system. If your score
doesn't meet the guidelines for the specific program you want (regardless of your actual credit),
you cannot have that loan.
Most common things that lowers peoples credit scores are:
- a. Late payments to creditors
- b. Proportion of balance to high credit (being "maxed out" on
cards)
- c. Number of finance company loans.
This lowers you score because the theory is that if you could get a loan from a bank you
wouldn't be using a high interest rate loan from a finance company.
- d. Number of recent inquiries into your credit account
- e. Judgements, collections, liens, foreclosures, bankruptcies
For an analysis of your score and/or credit, give us a call.
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Sources For Home Loans & Mortgage Info:
How does my credit score effect my loan?
Your credit score effects your loan in a number of ways.
- a. First off if you score is not 620 or better, you cannot get a"conventional" loans with most lenders.
(Paramount has a conventional loan for people with credit scores under 620.)
- b. Secondly your credit score can effect the pricing on your loan. Depending on your score, your rate may
be higher or lower than others.
- c. Many equity loans and second mortgages rely totally on credit score.
Sources For Home Loans & Mortgage Info:
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