Increased Importance Of Credit Score

By
Real Estate Broker/Owner with eDrake

Real estate info & tips: Increased Importance Of Credit Score. Lenders rely heavily on their own internal automated underwriting system or on those originated by Fannie Mae or Freddie Mac. Combined with a tri-merge credit report derived from the three major credit reporting agencies—Equifax, Experian, and TransUnion—underwriting today is often quickly accomplished by a loan officer or processor. The Fair Isaac Corporation (FICO) score remains the most commonly used by lenders, although a new Vantage scoring system is now available. With the general tightening of qualifying standards due to the current financial market, an optimum credit score has become more important than ever. How a Score Breaks Down A credit score is based on five factors. Each factor represents a different percentage of contribution to the overall score. Payment history 35% Have you paid bills on time? Current total debt 30% How much is too much? Length of credit history 15% How old are your accounts? Requests for new credit 10% Are you taking on more debt? Types of credit in use 10% Is it a healthy mix?

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