Understanding Your Credit Score

As you probably know, your credit is an important factor when determining your eligibility for a home loan. It is also a factor that will help determine your interest rate for a home mortgage.

Being “in the know” about your credit is important. One of our experienced Mortgage Consultants can counsel you about your credit score. The first step is to fill out an application. When the application is complete, they can pull credit. This score will allow them to talk you through specifics regarding your loan status eligibility and potential interest rates.

If your credit score is not where it needs to be, one of the Park Mortgage Consultants can give you steps to take to build your credit. They can also suggest a time frame of when you could potentially check back in and re-evaluate your score and eligibility.

Information to keep you “in the know”: Your FICO credit score takes five things into account. Here is the break-down of those five areas:

35% Payment History – payment patterns of debts
30% Amount Owed – If what you currently owe is reasonable for your credit profile
15% Length of History – The average age of all your accounts
10% New Credit – How much new credit you have to your name
10% Types of Credit Used – How many types of accounts you have (loans, credit cards, etc.)

What your score means to lenders:

Excellent (800 or Higher): Applicants with scores in this range are at the top of the list for the best rates from lenders.
Very Good (740–799): Applicants with scores here are likely to receive better than average rates from lenders.
Good (670–739): Only 8% of applicants in this score range are likely to become seriously delinquent in the future.
Fair (580–669): Applicants with scores in this range are considered to be subprime borrowers.
Bad (579 & Below): Credit applicants may be required to pay a fee or deposit, and applicants with this rating may not be approved for credit at all.