More on Credit Scores

 There is an abundance of misinformation about credit scores. The information below is accurate and if you have any questions please don’t hesitate to contact me.

 

1. The Players

•    Beacon at Equifax

•    FICO Risk Score at Transunion (Empirica)

•    Experian/Fair Isaac at Experian

 

2. Main reason for FICO Scores is to predict your chances of default on a specific loan.

 

•     Scores range from 300-850.

•     Scores below 620 are considered high credit risk

•     Scores over 660 are below average risk

•     Scores of 720 or above are considered excellent.

 

 

3. How 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 (credit inquiries), meaning that every time you apply 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 items and it's understood you're shopping for one item.

Contact:
Rich Hirsch
Senior Loan Officer
(908) 410-9066
http://www.mortgagemaster.com/rhirsch
NMLS #21441
NJ LIC #0749868  PA LIC #27282