What Does My Credit Score Mean?

By
Services for Real Estate Pros

The concept of credit started back in 1956 with two men named Bill Fair and Earl Isaac. Fair, a mathematician, and Isaac, an engineer, founded the Fair Isaac Company; otherwise, known to us today, as the FICO score. This credit system has standardized the way the financial industry extends "credit".

The 3 National Credit Bureaus:

1. EXPERIAN - uses the Fair, Isaac Model
2. EQUIFAX - uses the Beacon scoring Model
3. TRANS UNION - uses the Empirica scoring Model

EXAMPLE:              

Experian

720

Equifax

657

Trans Union

717

 In this case, 717 would be the middle score.

 

Credit score rating:

EXCELLENT

850-730

GOOD

729-680

FAIR

679-620

POOR

619-500

NO FEDERAL FUNDING

500 and below

 

 

 

 

These scores represent a composite of the borrower's credit history, employment, ability to save, and so on. The higher your score, the more chance you have of receiving credit with a low interest rate.

                  

 

When lenders review one's credit score, it's reviewed by an underwriter. The underwriter and credit scores are assessed and rated by the following criteria:

Lifestyle History

  • How long you've lived at your residence
  • Do you own or rent (Owning property earns extra credit)
  • How long you've been employed at your current job
  • Education level (College Education earns extra credit)
  • How much money earned and how credit has been used

Payment history

  • Public record and collection items (means lower credit rating)
  • Severity, recent and frequency of delinquencies noted in trade line section

Outstanding debt

  • Credit history
  • Number of balances recently reported (more credit lines / higher risk grade)
  • Average balance across all trade lines (balances 60% max / higher risk grade)

Pursuit of new credit

  • Number of inquiries and new account openings in the last year
  • Amount of time since most recent inquiry

Types of credit in use

  • Number of trade lines reported for each type
  • Bankcard
  • Department store cards
  • Personal finance company references
  • Travel and entertainment cards
  • Installment loans

  

Quick 'Improve Your Credit Score' Tips:

  • Bring credit cards balances below 40%
  • Close Credit Cards you do not use
  • Contact Dmitry at 386-627-1348 or e-mail dperlovich@yahoo.com to help you understand and improve your credit report

 

My job is to promote and educate the importance and meaning of credit worthiness. My commitment is to establish long term relationships with my clients by implementing tested Legal methods to improve their credit.

Request your FREE credit rating

I'm looking forward to providing you with the best home loans to meet your needs! Please share this information with your friends, co-workers, and neighbors and when you hear anyone talking about a home loan or credit challenges they might be facing please pass my information to them. Your referrals are a blood life of my business.

                                                                     

Comments (2)

Shiela Nacasi
Bad Credit Resources - Jackson Mountain, NV

By learning how to understand our credit, hopefully we will eventually be able to let your credit work for us. Pay your bills on time, do not apply for too many bad credit cards or bad credit loans and try to build up our credit score. These are all the right steps to help us understand your credit and use it to your advantage.

Jul 10, 2008 07:41 PM
William E. Lewis, Jr.
William E. Lewis, Jr. & Associates - Vero Beach, FL

Interesting post as it relates to credit issues in today's market.  Should you every have any questions as they relate to credit repair or credit restoration, please do not hesitate to contact me at (954) 581-5050.

Aug 10, 2008 12:07 AM