| You and Your Credit Rating |
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Definition of Credit: Trust in one's integrity in money matters and one's ability
to make payments when due. (Webster's New Collegiate Dictionary)
Your credit reports are an ongoing look at how you manage your finances. You must
know exactly what your credit reports say about your financial history before you apply
for a mortgage, because the reports play an important role in the moregage approval
process and in determining the interest rate and other loan terms that a lender offers you.
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| Good credit requires three basic steps: |
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- Evaluating your current credit
- Establishing new credit (for first-time borrowers)
- Improving your existing credit
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Obtaining Your Credit Reports
3 major credit repositories: |
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Equifax
P.O. Box 740241
Atlanta, GA 30371
(800) 685-1111 |
Experian
P.O. Box 2104
Allen, TX 75013-2104
(888) 397-3742 |
TransUnion LLC
P.O. Box 2000
Chester, PA 19022
(800) 916-8800
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| Credit Scoring - FICO scores |
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700 - 800 Excellent
620 - 700 Good
400 - 620 Fair
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| Most Important Factors Affecting Credit Score |
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Length of your credit history
Payment History
Outstanding Debt
Credit Inquiries
Types of Credit
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One does not need to have perfect credit in order to get loan approval. However, the
better your score is, the lower your mortgage rate is going to be. Generally, any
judgments, collections and tax liens need to be paid off prior to getting your loan
approval.
* Credit reports should be checked at least twice yearly for mistakes & errors * |
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