Everybody has a credit score calculated at the time your credit report is requested. That is if you have ever requested credit, meaning a Credit Card, an installment loan or any type of loan that gets reported to a Credit Bureau.
It's based on over 100 different proprietary variables and algorithms developed by Fair Isaac (FICO). The range is 300 to 850. You can get your credit score from Experian or Equifax. Most lenders consider people above 650 to be prime borrowers, meaning they will most likely be approved at favorable rates. According to my credit report from Equifax, 71% of the people with a credit score from 500-550 will default on their credit. Another 51% of buyers with a credit score from 550-600 will default on their credit. That's pretty scary. This is why lenders run your credit report and head straight for your FICO Beacon score.
Do you know your Credit Score?
You should start planning 6 months before you plan to purchase a home. At this time you want to find out what is in your credit report and if you need to clean something there or pay off some debt so you can be ready to get a mortgage.
Te best way to get a free credit report without getting hit for checking it too often is to go to:
https://www.annualcreditreport.com/cra/index.jsp
You can request a FREE credit report from this site every 12 months. This will not give you a score, you will have a choice to purchase one if you decide, but I do believe that the most important thing is to see what is in your report and not worry too much about what your credit score is, unless you really want to know.
No comments:
Post a Comment