What Does Your Credit Say About You?

A credit report is more than just a snapshot of your financial picture; it can assist credit grantors in determining your overall risk factor. Additionally, lenders, credit grantors, and even human resource departments often use it as a tool to determine a person's character.

When applying for a mortgage, your lender will request a credit report from one or all three consumer credit agencies. While credit repositories do not divulge exactly how the scoring model calculates the numerical score, the score determines your credit standing and worthiness. This score is based on several factors including types of credit, amount of credit and your payment history. For instance, if a score is 679 with a 12-month mortgage reporting 30 days late; or a 620 score with no mortgage lates and a credit card under half the credit limit ? who would you lend to? When refinancing or purchasing a home, the accuracy of this information could literally mean thousands of dollars either saved or lost.

Vital information is constantly streaming into your credit report, both accurate and erroneous. Due to the level of erroneous reporting, there has been pressure on Congress to make the credit repositories more accountable for the accuracy of the information AND to divulge what goes into the scoring models. However, do not leave it to Congress to straighten out the pitfalls of errors on your personal credit report. You should check your report annually to insure that all the data is accurate.

Why is this important? The lending industry is moving toward "risk-based" pricing. In other words, the higher one's credit scores, the less paper they will have to provide to prove that they are creditworthy AND the interest rate and/or fees a borrower pays will be based on the level of their scores. The higher the score, the lower the rate, payment and many times the down payment. Does this mean that people with challenged credit should not apply? Not at all. No different than one of us lending a co-worker or family member a couple hundred bucks until payday, the lender simply wants to make sure they are protected. A loan may still be granted in this scenario by perhaps requiring more money towards the down payment or a slightly higher interest rate.

The truth is, it's a great reward for those who maintain impeccable credit and a goal for others. With this in mind everyone can take advantage of low interest rates.

Le'Andra Martin, Branch Manager with American Mortgage Specialists can be reached at 866-824-9549. She is dedicated to helping homeowners and investors maximize the investment in their homes.

---

Credit Card Debt: How To Control It

A lot of people spend more money than they can... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

Credit Counseling Basics

Credit counseling is an option you might want to consider... Read More

Small Business Credit Cards

So what do you look for when applying for a... Read More

Why Is It important!

Your credit is the most important thing you have other... Read More

What is Credit Repair and How Can It Help You?

There are millions of consumer credit reports on file from... Read More

Getting Married? What Are The Finance and Credit Implications?

There is a big difference between looking after your own... Read More

Five Reasons to Repair Your Credit Score - You Can Do It Yourself

There are multiple reasons that tell us why we should... Read More

Shoppers Beware - Tis The Season

It's the number one complaint from consumers and it only... Read More

What Is a FICO Score and How Do I Make It Work for Me?

Whether or not you receive a loan and what interest... Read More

Commercial Collections And Credit Granting

It is estimated that billions of dollars in delinquent commercial... Read More

3 Free Credit Reports For You

If you were to tell someone that they can have... Read More

Building Business Credit

Most businesses want to be able to borrow money when... Read More

All Is Fair In Love, War, and, Your Credit Report - At Least It Should Be! Understanding the FCRA

Fact: Over 150 million Americans have credit report with the... Read More

Tired Of Being Broke?...Learn How To Force Banks To Give You Money!

Imagine...obtaining credit that's incredibly easy...opening doors of opportunity you never... Read More

The Art of Stoozing to Make Money from Credit Cards

Make Money from StoozingStoozing, this is a sophisticated method of... Read More

The Truth About Credit

What you might not know about credit.Some people don't know... Read More

Like It Or Not, You Have A Score To Settle!

Like It Or Not, You Have A Score To Settle!... Read More

The Advantages of Credit Cards

There are many evils associated with credit cards, but there... Read More

Keep Your Credit History Clean - Remove A Negative Credit Record From Credit Report

The three major credit bureaus, Experian, Equifax and Trans Union... Read More

Credit Reports Inside and Out

The Credit Report is like your scorecard in the lending... Read More

Credit Damage: Getting Compensated for Your Loss

Until recently lawyers for victims of credit damage had little... Read More

Free Credit Report - Really

2005 marks the year that consumers will be able to... Read More

New Law Provides Free Annual Credit Report

As of Thursday, December 1, 2004, one-third of Americans will... Read More

Cutting Credit Card Costs

What are the APRs charged by the credit cards in... Read More

Identity Theft Exploding: Here?s How You Can Avoid Becoming A Victim

Americans are more concerned about identity theft than unemployment or... Read More

Credit Report ? How to Improve Your Credit Score

One of the great mysteries of life is how the... Read More

Different Types of Credit Cards and Features - Part 1

Just as there are too many credit card companies to... Read More

Useful Tips When Choosing Credit Cards

Chances are you have received your share of "pre-approved" credit... Read More

Building Good Business Credit After Bad Credit

Can you establish good business credit if you have bad... Read More

7 Compelling Reasons Why A Prepaid Debit Card May Be Just The Financial Tool You Need

Prepaid debit cards are great financial tools and may be... Read More

Is it Safe to Use Online Car Finance?

Online car finance is convenient. You can apply over the... Read More

Saving Money: Quick Cash, High Cost

I didn't think it was possible. But it is. Folks,... Read More