Check out these blogs and learn everything you need to know about FICO, one of the top three credit reporting agencies!
June 2015
Rental Payments and Credit Reporting
Credit history, scores may improve with bureau changes. According to a study in May by the Consumer financial Protection Bureau about 45 million adults in the US don't have any credit scores. It's a huge issue since your credit scores are used by lenders to determine eligibility for credit and what interest rate you qualify [...]
November 2010
Credit Scores … Real Time?
I talked with a member a couple days ago that was totally frustrated with the credit bureaus and the whole credit scoring process. Hmmmm…sound familiar? Jack’s situation was that he had paid off several bills with a bonus check from work about 10 days ago. He had called the three credit card companies involved and verified he had indeed posted the payoffs which totaled almost $6000. He then had his mortgage broker pull a new credit report thinking he would have the increase in credit score that he thought the payoffs would give. He only needed about 17 points to qualify for this loan but was told that his scores had actually gone down 2 points from a month prior. Well this is what prompted Jack’s call. He was confused and upset that he had read something I wrote previously about how FICO computes credit scores. He thought that by freeing up his credit lines and paying down the debt would help his credit scores. Was he right? […]
September 2010
FICO provides a bankers view
On occasion, I am asked are things better or worse? When it comes to “credit things” I think a higher percentage of people are trying to tackle their budgets by keeping their spending down to align more with their income realizing the tapping into their homes equity days are over, at least for the time being. Many people are tackling any bad credit they may have incurred realizing that any costs of credit repair are a drop in the bucket compared to just letting any bad credit stay on their credit report for 7-10 years. People are trying to be as responsible as possible to increase their credit scores because the reality is […]
FICO showing fewer car loan defaults
It’s true, new car loan defaults are decreasing! It’s also true it doesn’t take much of a rocket scientist to understand that by tightening down the lending criteria for consumers looking for new auto loans this would be an expected result. There are some interesting facts. Taking a look at the 720 credit score plus category FICO reports that in the May to June 2009 period 1 out of every 411 borrowers went 60 days or more past due on their new car loan payment. During the same time period in 2008, 1 out of 288 fell past due in the second year which is a 43% reduction. If you look at the same time periods but in the credit score range or 300 to 599 you’ll find almost an 11% 60 day delinquency rate for new car loans during the period ending April 2009 and a huge reduction down to 8% for the same period ending 2010. […]
May 2010
Credit Bureaus just can't get it right!
A discussion on a well guarded secret to keep your credit scores suppressed… One of our consultants popped in yesterday afternoon to drop off a deal (a good thing). He was telling me of a situation he ran into and wanted to know what kind of an effect it could have on his prospects credit score. Well the situation was a $110k line of credit which had a balance of 96k. This particular credit line was rated R-1 paid as agreed. A perfect rating, right? or was it? Unfortunately we see this kind of thing all the time… […]
What are mortgage lenders looking for?
Today, I’d like to tell you what mortgage lenders look for in when deciding on granting your request for a new mortgage loan. Now this is not meant to be an underwriting class but a basic understanding of the process and what you’ll want to consider as you begin thinking about buying a new home. When you’re looking for a new mortgage many lenders evaluate your credit based on the “Three C’s.” Credit Is it likely that you will repay the loan? Are your payments on time and up-to-date? Are you financially stable and reliable? What are your credit scores? Today’s marketplace, most conventional lenders require your scores to be in the 700+ range and most FHA loans a 620 score or higher. Capacity Are you able to pay the loan? What kind of outstanding personal debt do you have? Do you have enough earning power and net worth to repay a mortgage or home equity line of credit? […]
FICO's Toy Model Scoring System
Is there anyway to understand the FICO scoring system? That is the hundred dollar question! The FICO score created by the Fair Isaac Company is one of the most shall I say “guarded” secrets at the credit bureau’s. So much so that even senior executives under oath, have sworn they do not fully understand the exact reason for score movements under certain circumstances. I mean why does one persons credit score who is at 750 drop 15 points with one 30 day late on a charge card and other person’s whose score is at 650 drop 50 points with that same 30 day late? No other derogatory is reported yet Mr 650 had three times the point deterioration than Ms 750! Fair? Well, the truth is that there are so many factors that have been put into this system that the average persons head will spin (even the not so average) like a top trying to figure it out! […]
How is your mortgage affected by a bankruptcy?
Many people are concerned how their mortgage loan is affected if forced into a bankruptcy and when someone experiences financial crisis like job loss, medical crisis or business failure, it can become quite difficult for them to repay all of their existing loans or debts. Filing bankruptcy may seem to be a viable option in order to get rid of these debts, but you should know it may become difficult to qualify for a new mortgage. At least right away. You should also know that your existing mortgage gets affected when you file bankruptcy. What happens to your existing mortgage after bankruptcy filing? When you need to declare bankruptcy, you usually will want to file either chapter 7 or chapter 13. However, the consequences of filing chapter 7 are different from that of chapter 13. The effects on your existing mortgage after filing bankruptcy are discussed below. […]
Do you know the credit score breakdown?
Today’s posting will give you the FICO credit score breakdown. Knowing what to do and the areas to focus on when rebuilding your credit or if you’re looking to increase your credit scores can be the difference between success and failure. The term credit score usually refers to your FICO score, a number based on a formula developed by the Fair Isaac Corporation, which looks at a summary of all your credit accounts and payment history. Your FICO (credit) score determines your access to and cost of credit. Most lenders use it as the main basis for loan or credit approvals, so the higher the better and the lower the more problems. FICO score ranges from 300-850, and Fair Isaac calculates them for each of the three big credit reporting agencies: Transunion, Equifax, and Experian. Here’s how your score is determined: […]