Home     About Us    Contact Us     Contribute     Privacy
Investing
Stocks
Bonds
Mutual Funds
Biz
Credit
Career
College
Economics
Tax
More
 
 
Marketplace
Related Articles
Related Discussions
Related Definitions
Related Categories
Tip of the Day

Tip of the Day Ask For A Raise

Ask For A Raise - If you have been with the company for over a year and you have been working hard and feel that you are entitled to a...

read entire tip

Related Podcasts
Recently Added
Other Great Sites
 

Credit Score Home Loan

If you are looking at the prospect of obtaining a home loan, you need to understand your credit score, what to look for and what affects it. Home buyers who are seeking a mortgage find out early-on that their credit score plays an important part in the home buying process and in determining the interest rate that a lender offers.

Your credit score is a number that lenders use to estimate risk. Experience has shown them that borrowers with higher credit scores are less likely to default on a loan.

The three major credit agencies gather your credit information, plug it into a database and use a formula to determine your credit score, called a FICO, to determine your credit worthiness. They obtain this data from institutions which you done had business with, in the past including auto purchases, credit cards, and previous home mortgage loans. In addition any charge accounts such as department stores are included.

They tabulate all of you information and then use it to create a credit history. Your score is based on how well you meet your obligations, and if you miss or are late on any of your payments.

The three major credit reporting agencies don't necessarily use the same scoring software, so don't be surprised if you discover that the credit scores they generate for you are different.

When the credit bureaus compute your credit score they use the following breakdown of the approximate value that each aspect of your credit report adds to a credit score calculation. Use these percentages as a guide:

35% - Your Payment History 30% - Amounts You Owe 15% - Length of Your Credit History 10% - Types of Credit Used 10% - New Credit

Credit scores (usually) range from 340 to 850. The higher your score, the less risk a lender believes you will be. As your score climbs, the interest rate you are offered will probably decline.

Borrowers with a home loan credit score over 700 are typically offered more financing options and better interest rates, but don't be discouraged if your scores are lower, because there's a mortgage product for nearly everyone.

Discuss It!
Most Popular Articles
Most Popular Definitions
Related Questions
 
Daily Definition

Definition of the Day Leveraged Investment Company

Leveraged Investment Company - Leveraged Investment Company is a company whose charter allows it to borrow money for investing activities. A venture company or mutual fund entitled to borrow capital for its operations. It is an investment company that issues both income shares and capital shares. It is an investment...

read entire definition

 
 

 

 

Home     About Us    Contact Us     Contribute     Sitemap

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Copyright © 2009 TeenAnalyst.com