Buying? Credit Check!

Now that the current market has shifted to the buyers, today’s buyer’s are in the drivers seat and sellers are much more likely to offer incentives, such as paying for the buyer’s closing costs. But in order to seize in the opportunity, buyers must qualify for the mortgage, thus do some homework on polishing their credit score.

Here is some useful information in regards to the FICO credit score:

1. The Players
   • Equifax
   • Transunion
   • Experian
2. Main reason for FICO Scores is to predict our chances of default on a specific loan
   • Score ranges from 30-850
   • Scores below 620 are considered high credit risk
   • Scores over 660 are below average risk
3. Hoe are the scores weighted
   • 35% is established from your payment history, collections, and public records
   • 30% is established from outstanding balances being carried on your accounts
   • 15% is based on your length of credit history. It is better to have credit for longer timeframes, so that a history is built up on your record
   • 10% is established around the type of credit you have
   • 10% is established around your request for credit, your scores are impacted within certain FICO rules. You can, however, apply for as many mortgages and car loans as you want, as long as they are in a 14-day window. FICO allows this because they are big-ticket item