How Important is credit Now

Credit has started to play a very important role in our lives

You go to get a serious job they will want to run your credit , if you go to get insurance some of the insurance company's want to look at your credit before giving you insurance , car loans and of course mortgages .With the new guide lines in place from FNMA and FHLMC, both the agencies that securities most of the mortgages in the country have risk based add on to the rates and points on prime loans which scores below 680 and down payment below 30%. You can lad up paying as high as 2 Points if your score is at 620 and down payment is less than 30%.

I rarely see Buyers that have a 30% or more down payment , so the fact remains that most buyers that do not have scores over 680 will be impacted . so is credit important , sure if you want to get the best rate on prime as Sub prime is almost non existent . The gole is to get buyers pre qulified before looking at houses , and a lot of times I have asked my customers to pay of a small debt or may be even go and use a credit card which has resulted in a higher score which means a better mortgage rate for you customer.

Scary part is banks go to college campus and give out credit cards with out teaching them how to manage credit

That what can make them a customer for life , as it shows you care

Posted by Raj Rajpal on 01/25/2008 10:41 AM

Comments (11)

mortgage, rates, credit, real estate

11 Comments on How Important is credit Now

Credit is so important these days. I can't believe that it even affects your car insurance.

01/25/2008 10:46 AM

by Jeff Kessler ABR,GRI, Texas 512.801.5666 (Austin Homes Realtors)

Most young people don't know the first thing about credit scores. Too bad all the credit card companies give irresponsible young people a card without a warning label..."Warning, using this irresponsibly can ruin your credit and your life"

Vickie Nagy http://www.besttrivalleyhomes.com/

01/25/2008 11:09 AM

by Vickie Nagy, Realtor, Specializing in San Ramon, Danville & the Tri-Valley! (Empire Realty Associates)

Credit Cards are given out to freely especially to young adults. The credit card companies should not be allowed to give cards, especially to college students without full time jobs. Gaye

Thanks Raj, your information is always so informative

01/25/2008 09:10 PM

by Gaye Granice, Associate Broker (Appleseed Homes GMAC Realty)

Credit score most definitely affects your auto insurance rates. When I counsel prospective clients on Short Sales, it is one of the points I discuss with them. So many things are tied to our credit scores that preserving it is more importatnt than ever... and another reason to explore a Short Sale versus a froeclosure if at all possible.

01/25/2008 10:11 PM

by Steve Shatsky - Dallas Real Estate & Short Sale Specialist (Keller Williams-Dallas City Center)

The one topic we don't teach in high schools is financial management, we aspect people to figure it out, and many times they don't until it's too late. Having your credit checked and maintained is vitally important. There's jsut so much misinformation out there, and the credit industry has gotten such a poor reputation that it leaves a lot of people out of the loop when it comes to getting good advice for their credit situations.

01/26/2008 02:21 PM

by American Homes

Great information. I think kids need to have financial managing information classes before getting credit. Young adults don't realize how much they are affected by credit scores.

01/26/2008 03:41 PM

by Kelli Smith (Plaza Lane Mortgage & Investment Co.)

I remember when my son was in college and he was eligible for a major credit card based on ANTICIPATED INCOME!

01/27/2008 12:54 PM

by Rosa Updale Associate Broker (Appleseed Realty GMAC Real Estate)

Raj, you're right about the jobs and insurance companies running your credit. As to the insurance, my company was involved in a Supreme Court effort to stop insurance companies from charging higher premiums to people with low credit scores (as if having a low credit score has a correlation with whether or not your house burns down). In today's market, it is getting very difficult to stay afloat. Riding the storm out isn't gonna get it anymore.

01/27/2008 07:45 PM

by Russ Higgins. Credit Justice Services (Credit Justice Services)

Holy mollies, they run your credit to get a job now? That's ridiculous.

01/28/2008 10:19 AM

by Ron Avneri Mortgage Professional (Mortgage NOW Inc.)

People forget that the insurance companies have started looking at credit scores. It is a good idea for buyers to try and get insurance quotes when they put an offer on a house.

02/13/2008 06:05 AM

by GITA BANTWAL, REALTOR BUCKS COUNTY, PA HOMES (ReMax Centre Realtors)

This is one of the reasons I teach a class on credit at the same time I teach a class on buying a home. Most people don't realize how easy it is to do little things to improve your score and what impact it really can have on your life.

06/26/2008 12:53 AM

by Todd Clark (Realtor), GRI (Washington Co, Beaverton Oregon) (Kastings & Associates, Beaverton Oregon Real Estate)

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