Who Keeps Track of My Credit?

Many of our clients are hyper focused on their credit report and their credit scores because they want to buy a home in NC, and they need to get their scores to the point where that dream of owning a home becomes a REALITY!

A credit report is just a complete accounting of your credit history, and although it’s a bit confusing, Einstein did NOT make the system up!

Your credit report records:

• Payment histories and amount of time accounts are open.
• Request for credit (inquires),
• Results of legal proceedings and personal data (like where you live and tax collections)

There are three major credit reporting agencies (or repositories) and each uses its own scoring model.  The three major credit reporting agencies use the following scoring models:

• Experian – FICO (Fair, Isaac and Company)
• Equifax – Beacon
• TransUnion – Empirica

You are not “born” with a credit score – and it’s not something like your social security number you “apply” for. Your credit score is an ever growing / changing number based upon your history.  The score is a 3 digit number and typically ranges from 350 to 850.  (Theoretically it is possible to have a score of 0 or 999).

Credit Scores were credited in a effort to take the “personal, subjective” analysis out of obtaining credit. A  credit score is considered a more objective way to determine oveall credit worthiness.  Statistical analysis removes the subjective, judgemental aspects of determining whether credit should be granted.

The 3 digit score estimates a consumer’s willingness and ability to repay a debt based on previous behavior. A score of 500 indicates that the consumer has a statistical 50/50 probability of repaying a debt.  This is why the current “minimum” scores needed for the “best rate” mortgage programs is close to 700!

Fortunately, the FHA Mortgage Loan program will accept scores in the low 600 range!  For more information on your credit report and how to qualify for a mortgage loan Call Steve and Eleanor Thorne, 919-649-5058!