What's Your Number? The Facts about Credit
This information focuses on helping you start your journey into homeownership, which begins with getting a pre-approval letter for financing from your lender (or I can refer you to a top-notch lender, who works with many of my clients) - if you need a loan to purchase a home.
Your credit score is one of the most important numbers you have. Not only does your score affect your interest rates when applying for a loan, it can also impact your insurance rates, certain job prospects and even your chances of renting a great apartment. Because of this, improving one's credit has become a multi-million dollar industry.
What's your credit score?
Your credit score indicates to lenders and other businesses how much of a credit risk you pose if they allow you to borrow money. The Fair Isaac Company (FICO®) uses an algorithm that takes into account 30 different factors within your credit report to arrive at a score from 300-850. The higher the score, the better the credit risk you are to lenders.
Other credit reporting agencies, such as Experian, Equifax and TransUnion, calculate their own credit scores within their own ranges; however, the FICO® score is the standard that lenders use when they pull your credit score.
Visit www.nabilcaptan.com for more information about taking control of your credit.
How is your credit score calculated?
- 35% Payment history
- 30% Amounts owed
- 15% Credit history
- 10% Inquiries, new credit lines
- 10% Types of credit in use
How long will dings to your credit be held against you?
In most cases, it's only a matter of time before they fall off your credit report. The good news is that the older the negative information, the less it impacts your credit score.
If you have had ___ It will stay on your credit report ___
- Late payments: 7 years
- Judgments: 7 years
- A short sale: 7 years
- A foreclosure: 7 years
- Chapter 13 bankruptcy: 7 years from filing date remain indefinitely)
- Chapter 7 bankruptcy: 10 years from filing date
I look forward to discussing your particular real estate goals soon! Contact me via email or (619) 209-9953.
Krista Bell, REALTOR®
(619) 209 9953
*Source: Nabil Captan, The Credit DVD