It represents a picture of the your credit history at one point in time.
This report is obtained from a credit reporting repository such as Equifax, TRW or Experian.

What is the range for credit scores?

Credit Scores can range from a low of 300 to a high of 850 points.
The lower the score, the higher the risk of default, and therefore a credit decline.
The higher the score, the lower the risk of default, and therefore an approval! ☺

The “benchmark” for a “conforming” loan is 620 credit score.

Lenders look at the middle of the three reporting scores, or the lower if only two scores report.

A recent survey of loan applications by WierdLonas.com showed that the average credit score in Florida was 624.

How does this impact you as a home buyer?

Fact: Most people can be qualified for a home loan

Caveat: Can you afford the payment?

Caveat: Can you afford the closing costs?

Caveat: Do you have any money for the down-payment?

Taking some of the mystery out of credit scores!

Remember, the credit report is a “snapshot” in time, but it also encompasses a history of payment.

What is included to “come up” with a score?

Past payment history
Includes information from public records such as bankruptcies, foreclosures, judgments, tax liens, etc.
Trade line repayment history
Outstanding debt utilization
History of credit establishment
Type of credit being utilized
Credit inquiries

I pay my bills…………..

But, are they paid AS AGREED?

Paying your bills is the most important, but creditors are looking for people with the financial discipline to pay their bills on time, as agreed.

Remember the old adage, let sleeping babies lie?
Leave old bad accounts alone.
Do something with the new bad accounts.

Do credit reports sometimes contain errors?

YES!

What can I do about errors?

It depends on where you are in the home buying/financing process and the potential impact of the errors.

Disputing Errors on the Credit Report

You must have supporting documentation – nobody will take your word for the error.
You must dispute the item with EACH bureau that reports the item.
Send your request with supporting documentation using a return receipt request from the Post Office. Now you can confirm when the protest period began.

How long does this take? Under the Fair Credit Reporting Act, 1997 the credit repository basically has about 35 to 40 days from the point at which the dispute is received by the credit repository to respond to the consumer’s inquiry.

But I/we don’t have that much time!!!!!

We can do a “Rapid Re-Scoring” for your Credit File

Costs vary, but will generally be around $100 or so per line item if all three bureaus are involved.
You must be able to supply written proof concerning the items disputed.
Confirm Changes have been made.
Obtain new credit report with new scores.
Scores can improve on average 25 to 100 points when significant errors are corrected!
Timeframe can be a short as 36 hours once complete information has been provided.

Who can help me with a Rapid Re-Score?

WE CAN!

Major No No’s that you need to know once you begin the home ownership quest.

NO NEW DEBT OF ANY KIND!
NO APPLICATIONS FOR ANY KIND OF DEBT!
Make sure you keep current on all existing debt.
Window shopping only! No Rooms To Go, etc.
Don’t get fired or quit, the last thing the lender will do is to reconfirm employment and obtain a FINAL CREDIT REPORT!!!!!!!

The Mortgage “Waterfront” and Rates

FNMA Conforming Loans – can have great rates, very few “credit issues”
"Not quite" FNMA eligible – can also get some great rates even with a few more credit issues!
Some significant credit issues – less than “stellar rates”
Some MAJOR credit issues – ie. BK, judgments, etc. – let’s not quibble about the rate, just be thankful someone thinks you’ll repay the loan!
Portfolio loans – special situations, very limited availability, generally not a great rate, but possibly may be.

Financing Alternatives

Working with a lender that can provide the entire range of options for you and can often save you money and require less money upfront. We have over 250 lenders to choose from.
Mitigating circumstances can be considered with some lending programs, but not for others. Our specialty is knowing which lenders and/or programs can accommodate your situation.
Knowing the differences will help get you, the borrower on the right path to the best loan for your new home or refinancing your existing home.

What’s the bottom line to all of this?

Having a lender pull and review your credit report will at least give you an idea of where you may be on the Mortgage “Waterfront”.

This isn’t a pre-qualification – that will entail the lender taking a COMPLETE application. But it is a STARTING POINT that can prevent YOU from spending a lot of your time and effort looking for houses that you can’t be qualified for!

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