Credit Help for Real Estate Financing: Credit Scores

When you buy real estate, lenders run all of the "big three" credit bureau reports. Each credit reporting agency lists your credit history as supplied to them by the individual lenders and includes governmental records. Each report assigns a credit score number to you. The credit scores reflect your theoretical risk of default to the lending institutions.

Software developed by Fair Isaac and Company generates your "FICO score." Experian uses a system called Fair Isaac Risk Model, a computer program which rates you with a score according to Experian's information. Equifax bases scores on BEACON programs and TransUnion bases scores on EMPIRICA models.

Your Baseline

You have three credit scores, often called FICO scores, one from each credit bureau. The lender takes the middle score as your baseline. Lenders have different standards, but generally a "C" score is around 500 to 600, a "B" is around 600 to 680, and an "A-" is above 680. Over 700 is the magical number that gets you the attention you desire. If your score is under 500, find someone to privately finance for you or a partner with good credit while you work on improving your score.

How Lenders Rate You

Credit score Available mortgage financing
720 - 800 Superb! You get what you want
700 - 719 Wonderful! You get top rates & terms
680 - 699 Good! You get good rates & terms
660 - 679 All right. You pay higher costs & rates
640 - 659 Okay score if good income
620 - 639 Weak. You need good income & some money
600 - 619 Poor. Use creative loan broker & pay more loan costs
580 - 599 Almost impossible without large down payment
Under 580 Work on fixing credit without delay

What Does Not Count In Your Credit Score

The scoring model doesn't compute:

Age & gender
Race
Whether you own a home or rent
Length of time at your current address
Job or length of employment at your job
Income
Education
Marital status
Whether or not you've been turned down for credit.

Real estate lenders don't just consider your credit score when you apply for mortgage financing. Understanding your credit score helps you with this one part of your mortgage requirements.

Copyright © 2005 Jeanette J. Fisher - All Rights Reserved.

Professor Jeanette Fisher, author of "Credit Help! Get the Credit You Need to Buy Real Estate," "Doghouse to Dollhouse for Dollars," and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, and newsletters, see http://www.recredithelp.com/

---

Bailiffs & Council Tax - Knowing What To Do

This article is about bailiffs who may call trying to... Read More

Consumer Credit Reports

A consumer credit report is a factual record of an... Read More

Have You Ever Opened a Checking Account?

Maybe some of you are saving it in your trusty... Read More

Choosing a Credit Counseling Company

If you have considered credit counseling as an option to... Read More

Credit Repair Companies and Credit Counseling

Let's be crystal clear, right up front. Paying someone to... Read More

Credit and Banking Money Saving Services

The first rule when applying for banking and credit services... Read More

How Do I Establish A Good Line of Credit?

A line of credit, roughly defined, is the amount of... Read More

5 Things Your Credit Card Company Keeps Quiet About

Credit Cards can bankrupt you if you let them run... Read More

Making Sense of Credit Card Fees

In addition to the APR (annual percentage rate) and the... Read More

Credit and Its Cost

What is Credit? Credit is money granted by a lender... Read More

Why Should You Use Credit Cards

Believe it or not, the way society, especially the commercial... Read More

What is a Credit Report?

Ever wondered what is a credit report? If you've ever... Read More

Various Types of Credit Cards - Part 2

Several different types of credit cards offer several different options,... Read More

Choosing The Best Credit Card To Apply For

Always shop around to get the best deal when choosing... Read More

Guide to Credit Terms

Listed below is a useful guide to credit card terms.... Read More

All Is Fair In Love, War, and, Your Credit Report - At Least It Should Be! Understanding the FCRA

Fact: Over 150 million Americans have credit report with the... Read More

Credit Card Tips

Here are some useful credit card tips for you to... Read More

Useful Tips When Choosing Credit Cards

Chances are you have received your share of "pre-approved" credit... Read More

Top 7 Factors to Consider While Reviewing Credit Card Offers

Credit cards have migrated from being hip or convenience product... Read More

The Easy Way To Gain Access To Your Free Online Credit Report

When you apply for credit, those lending you the money... Read More

Opting For A Credit Card? Check Out Certain Terms

You've just received a "pre-approved" credit card offer in your... Read More

The Three Largest Factors In Your Interest Rate

There are three major factors that affect how much you... Read More

Identity Theft ? Who Would Want Mine?

With all my bills who would possibly want my credit?... Read More

What To Look For In A Credit Card

When you are deciding what type of credit card to... Read More

What You Need To Know About Credit Cards

What is a credit card? A credit card is... Read More

Teaching Students To Keep Out Of Credit Card Debt - The Parents Role

Parents have the full responsibility for their children and their... Read More

A Summary of the Fair Credit Reporting Act

This summary of the Fair Credit Reporting Act will explain... Read More

New Credit Scoring Model Could Help Millions

Mark and Beth, a young married couple in their twenties,... Read More

Boosting Your Credit Score To Get The Best Credit Card Deal

Making Your Credit Rating Work For YouOne of the basics... Read More

Big Brother Knows Whats in Your Credit Report - How About You?

Whether you are aware of it or not, credit bureaus... Read More

Credit Card Traps: How To Spot Them On The Spot!

They arrive in your mail - a conspicuous looking mail... Read More

Stop Credit Card Offers

You can stop receiving credit card offers in the mail!... Read More

Understanding Credit Report Score

Understanding credit report scores is important when you see your... Read More