Pam Rumley is a veteran real estate broker in the Nashville, TN area. She is a true Exclusive Buyer's Agent. There is never a conflict of interest regarding your real estate transaction. You can be assured of receiving 100% of her attention and loyalty - 100% of the time. For more information, visit her comprehensive website, www.NashvilleRealEstateAuthority.com
It Doesn't Matter What You Buy!
A home, a car, insurance, furniture, appliances, or any other purchase. Your FICO (credit) score will determine your qualifications and interest rate.
This can translate into a lot of money over the years. Just a 1% increase in your interest rate (from 6% to 7%) on a $100,000 mortgage will add up to about $65 per month...which equals $23,400 over the life of the loan.
So, it's vitally important to safeguard your credit information.
Your history of paying your mortgage, car and credit card payments will be analyzed for the last 7-10 years and a lender will be able to determine whether you're likely to meet future obligations.
Mortgage lenders typically use reports from the three (3) major credit reporting agencies, Equifax, TransUnion and Experian...and make their decision based on the middle score.
How is Your Score Calculated?
* Your payment history - 35%
- Number of accounts paid as agreed
- Negative public records or collections
- Delinquent accounts
1. Number of past due items
2. How long you're past due
3. How long it's been since you've had a past due payment.
* Amounts you owe - 30%
- How much you owe
- Types of accounts with balances
- Percentage of revolving credit that is used
- Whether you're paying down installment loan balances
* Length of Credit History - 15%
- Total length of time credit has been reported
* Types of Credit Used - 10%
- Mortgage, installment, revolving, etc.
* New Credit - 10%
- What's been recently opened...or have there been a lot of new inquiries?
What's a Good Credit Score?
A mortgage lender will usually want to see a middle score of at least 620 for a conforming loan. A score of 680-720 will enable you to take advantage of the better interest rates.
It is advisable to check your credit report annually...always making sure that there are no errors.
There are many sites where you can go online and purchase a credit report and score.
Do You Know how your Credit Score affects Your Life?
We have just gone over how your score is calculated...but do you that it will affect many other areas of your life?
Insurance companies, landlords and employers are now starting to let the credit score determine their approval ratings. They will call it an "insurance score"...or another name.
But it is all the same. They're basing it on your credit score.
Insurance
Your credit score can affect your homeowners insurance...auto insurance...as well as your life and health insurance.
It's just not worth it to have anything detrimental on your credit report!
Employment
Yes, believe it! Many employers check credit scores before they hire someone. They claim that they check your credit to verify information...but don't assume that they're not looking at how you handle your financial affairs.
This is yet another reason to frequently check your credit report and take care of any errors quickly!
As always, contact me with any questions you might have. I look forward to hearing from you!
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