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.

---

Understanding the Function of Credit

What is Credit?Credit is the backbone and the engine behind... Read More

Debit Card vs. Credit Card, What Are The Differences ?

Ah, the "good old days". If you are a baby... Read More

Credit Cards -- What You Should Know

There are a lot of questions about using credit cards.... Read More

A Debt Mentality

While working through my own debt situation, and helping others... Read More

Special Credit Information for Married Couples

If you are married, establish separate credit accounts.Try to finance... Read More

SuperCharged Secret 4, Credit Card Utopia

YOU SCRATCH MY BACK, AND I'LL BUY SOME MORE BEER!Let's... Read More

Finding and Applying for the Right Credit Card Offer Online

Anywhere you go online nowadays, you will see a multitude... Read More

My Credit Card Application Was Rejected! Now What?!?

No doubt, you've probably gotten literally hundreds of credit card... Read More

Credit Report And Correction Techniques

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

10 Signs You May Need Credit Counseling

Debt management programs can be of real help for people... Read More

7 Surefire Ways To Repair Bad Credit

Do you have a poor credit rating? If so, you... Read More

10 Simple Steps to Manage Your Credit

By far the greatest invention the banks have ever come... Read More

Recognizing the Signs that You Might Need Credit Counseling

Most families in America today have a credit card; some... Read More

Are 0% Credit Cards Reaching Their End?

Are Credit Card companies starting to feel the pinch? We... Read More

Low Interest Credit Cards Have Many Advantages

When credit cards are used wisely they can be very... Read More

A Summary of the Fair Credit Reporting Act

This summary of the Fair Credit Reporting Act will explain... Read More

Understanding the Process of Credit Counseling

Many of us have seen the advertisements on television. "Get... Read More

5 Steps You Can Take to Get Paid!

There are always some companies that have past due invoices... Read More

How Do I Establish A Good Line of Credit?

A line of credit, roughly defined, is the amount of... Read More

Top 7 Factors to Consider While Reviewing Credit Card Offers

Credit cards have migrated from being hip or convenience product... Read More

Rewards Cards: Are They Worth It?

Virtually all consumers will have a credit card at some... Read More

Balance Transfers Introduction

Credit card balance transfer involves using a credit... Read More

Avoiding College Credit Card Traps

Congratulations college freshman! You're about to embark on one of... Read More

How To Avoid Becoming A Victim of Identity Theft

With identity theft statistics currently at an all time high,... Read More

Will Inquiries Lower Your Credit Score?

What are inquiries?When you apply for credit the creditor or... Read More

Trade Credit: How to Determine if You Should Offer Net-30 Terms to Your Customers

What is trade credit?One of the major differences between consumer... Read More

How A Prepaid Debit Card Can Help You Rebuild Your Credit

Consumers today are up to their eyeballs in debt. And... Read More

Credit Scoring: What You Dont Know Can Hurt You

You've probably heard the term credit scoring. You may have... Read More

The Easy Way To Gain Access To Your Free Online Credit Report

When you apply for credit, those lending you the money... Read More

ChexSystems: Alternative Options for People Whove Been Checking Accounts

Individual banks elect to become members of ChexSystems, and to... Read More

Commercial Collections: Business Finance Booster Shot

Commercial collections: fixture of the new B2B cultureIf you're in... Read More

Can Credit Search Entries Affect Your Ability to get Approved for a New Loan in the UK?

About Search Entries:Every time a lender checks your credit history... Read More

Which Citi Mastercard Is Right For You?

You've decided to apply for a Citi MasterCard, but with... Read More