WHAT IS A CREDIT SCORE?
Lenders want to know two things about a borrower: ability to repay and willingness to repay.
The first requirement is based on the debt to income ratio and the second is based on the dreaded "credit score"
Credit scores do not consider income, assets, down payment or demographics.
Past delinquencies, derogatory credit behavior (remember your mom slapped you when you were derogatory!), current debt level, length of credit history, and types of credit as well as number of credit inquires factor in the score.
Each portion of the credit history is given differing weights.
35% of the FICO score is based on specific payment history.
30% is based on the level of indebtedness
15% is based on the time credit has been in use
10% is based on the types of credit available but unused
10% is based on the pursuit of new credit as revealed by the number of inquires in the past 90 days.
So there you are. The answer to the question you always wanted to know but was too afraid to ask.
Protect your credit! When getting ready to buy a house... don't do anything with credit until you talk with a qualified mortgage loan originator. Acquiring a new loan obviously will lower your score.... but so will closing an old account you haven't used for 10 years. Increasing a loan limit may increase your score! Go figger.
(Information compliments of Jeff Lichtenstein and Jim Hawkenberry of Market Mortgage.... 614-846-5626)
Who do you know that needs a knowledgeable Realtor or lender?
John Jacobus, ABR, GRI, CRS
RE/MAX Impact
Broker/Owner
440 Polaris Pkwy
Westerville, OH 43081
614-523-1000
Cell 614-296-8350
John@johnjacobus.com
www.johnjacobus.com