My life as a number: importance of Credit Score for 1st time buyers

Your credit score or commonly known as FICO score (stands for Fair, Issac and Company) is a number that indicates the health of yours score. The higher the number, the healthier your credit and the more likely a lender is to approve a loan with good terms. Scores can range from 300 to over 900, with typical score

falling in the 600s to 700s.

Credit score take 5 different financial areas into account. The five C’s of credit that lenders will look at include:

Capacity. Are you able to repay the debt? The lender verifies your employment information: occupation, length of employment, income. He or she reviews your expenses: how many dependents you have, if you pay alimony and/or child support, your other obligations.

Credit history. Based upon your past payment habits, how likely is it that you will make your monthly payment? The lender looks at how much you owe, how often you borrow, whether you live within your means, and whether you pay your bills on time.ome Buyer Hint

Capital. Do you have enough cash on hand for the down payment and closing costs? Are you receiving a gift from a relative? Will you have reserve money left over after the purchase?

Collateral. Is the value of the property worth the investment? Is it in sufficiently good condition and is the price appropriate for the home? If you do not repay the debt, will the lender be able to recover his investment?

Character. Have you disclosed all your debts? If you had previous credit problems, did you disclose them?

Similarly to credit report, for a fee, you can order a copy of your credit scores from one of the three national credit bureaus.

For more information, please go online

TransUnion: www.transunion.com

Equifax: www. equifax.com

Experian: www.experian.com