Home > Blogs > France and Mark Clausen > Trident Realty Group

My credit score's what!!!

By France and Mark Clausen

Real Estate Agent with Realty Austin

September 04, 2009 12:16 PM

My credit score's what!!! How many times have you heard that? In general people don't think much about their credit score until they need it. I thought it might be helpful to explain just what goes into your credit score.

Let's start with FICO. This is an acronym for Fair Isaac & co. whom developed the credit scoring system most widely used by lenders. The FICO model has a range from 340, very poor, to 850 very good. The system weighs several factors to determine credit worthiness.

record of timely payments - 35%
amount and type of outstanding debt - 30%
length of credit history - 15%
number and types of recently opened accounts - 10%
revolving credit - 10%

There are three major credit bureaus and typically the same individual will receive a different score for each one. When this happens the lender will use the middle score. In the case where the lender only pulls 2 scores they will use the lower score. The credit scores are rated in the following way.

750 - 850 A+
740 - 749 A
680 - 739 B
620 - 679 B-
340 - 619 F

I recommend that you take a look at your credit report at least once a year and examine it for discrepancies. There are several companies that will offer you 1 free credit report a year. If you find discrepancies on your report challenge them immediately. This can be done by writing a letter directly to the reporting credit agency and supplying them with proof of the pay off, duplication, name error, closed account etc. Send this information by certified mail. If the creditor fails to either correct the error or respond within 30 days they must remove the item from the credit report. If you have an unresolved dispute on an item you have the right to enter your side of the dispute onto your credit report in 100 words or less.

I hope you found this informative. I find that as a Realtor in today's market I need to be as equally well versed in the financing and tax implications of real estate as the real estate itself. Please feel free to contact me if there's anything That I can help you with.

Re-Blog

Comments(7)

Comment

Show All Comments Sort:

Pat Champion

John Roberts Realty - Eustis, FL

Call the "CHAMPION" for all your real estate needs

Great information on the credit scores-good to know how everything breaks down. Thanks for sharing this information.

Sep 04, 2009 12:19 PM

Susan Neal

RE/MAX Gold, Fair Oaks - Fair Oaks, CA

Fair Oaks CA & Sacramento Area Real Estate Broker

Hi France and Mark - This is good information that many people don't understand. And since we all have the right to get our credit report from each of the three reporting agencies for free once a year, there should be no excuse for not knowing what your score is. And if it is low, there are lots of things you can do to raise it.

I will reblog this post so even more folks will see it.

Sep 04, 2009 12:24 PM

Chanda Barrick

Keller Williams Indy Metro Northeast - Indianapolis, IN

in referral

Wow straight from a B- to an F... Definitely useful information. I get calls all of the time from people wanting to buy a home and they just don't understand you can't get a mortgage (at least a mortgage with a decent rate and terms) without a credit score of AT LEAST 620....and from what I understand they are now making the requirement more or less a 640...Is that true?

Chanda panda

Sep 04, 2009 12:40 PM

France and Mark Clausen

Realty Austin - Dripping Springs, TX

So far Wells Fargo is the only lender that I know going to 640 but where one leads the others will follow.

Sep 04, 2009 01:00 PM

Donne Knudsen

Los Angeles & Ventura Counties in CA - Simi Valley, CA

CalState Realty Services

France & Mark - With nearly eight years in the mortgage industry, it still amazes me the amount of people I meet who have never seen their credit report - ever!

Sep 15, 2009 05:05 PM

Her in Austin, we are currently dealing with a lot of first time home buyers trying to get in on the first time home buyer's tax credit. Unfotunately these are the same people that have never seen their credit report. Luckily I work with an experienced lender that has been great at getting their credit repaired. It is critical in this environment to have an experienced lender on your team.

Sep 16, 2009 01:26 AM

Pacita Dimacali

Alain Pinel - Oakland, CA

Alameda/Contra Costa Counties CA

France and Mark

It is always a good idea to check your credit once a year. And since you are entitled to get one free report a year, I thought that would motivate folks to do it.

Several years ago, when I started checking my credit once a year, I found a looooonnnnnggg list of credit cards I haven't used in decades. It was during a period of time when i was dopey enough to fall for the 10% off your first purchase if you get a credit card with the retailer.

So I formally cancelled as many of them as I can. It's better on your credit score to be the one doing the cancelling instead of the company.

Today, I only carry my Visa debit card, American Express and Master Card (for those businesses that don't take American Express). That's really all one needs!

Sep 30, 2009 07:47 PM

My credit score's what!!!

Comments(7)

France and Mark Clausen

Real Estate Resources

Recent Posts

Additional Information