* AR Members
I recently participated in a Housing Preservation workshop with a representative of Springboard, a non-profit consumer credit management company headquartered in Riverside, CA. They produce a variety of excellent printed materials, Q & A's and seminars and wanted to pass along their contact information as well as well as a link to an excellent publication entitled 'What Makes Up Your Credit Score'. Available as a web read or PDF download, this booklet is a must-read for anybody thinking about buying a home and maximizing your credit score. For additional information, please read my article entitled 'More Scam Artists Trying to Take YOUR Money'.
Understanding Credit Scores
A credit score is derived from information in your credit report. Your credit report reflects how you have handled your available credit in the past, and your credit score predicts how likely you are to pay your bills in the future based on information in your credit report.
What is a Credit Score?
You have three credit scores, one from each national credit bureau, which are a measure of your financial responsibilityt, based on your credit history. The score most often used by lenders is the FICO score, developed by Fair Isaac Co. FICO scores range between 300 and 850, although other bureau ranges may be higher or lower.
How Does Your Score Affect Your Buying Power?
Most lenders will look at your FICO scores when evaluating your credit report or loan application. If your FICO score is 500 - 579, you may qualify for an interest rate of 9.5% with a monthly payment of $2,523. A FICO of 620 - 659 may qualify you for an interest rate of 6.77% and a monthly payment of $1,950 and a FICO score of 760 - 850 may qualify you for an interest rate of 5.43% and a monthly payment of $1,691. All estimates based on a $300,000 mortgage in California.
Monitor Your Own Credit Reports
Every individual is entitled to receive one FREE copy of their credit report each year. To obtain your report, go to www.annualcreditreport.com. Beware of imposter websites that are 'phishing' to steal your identity.
Remember, Don't wait to buy real estate - Buy real estate and wait.