Credit Scores


	CREDIT SCORES - FICO SCORES
	Best Credit Scores and Fico Scores Information - We have loans for credit scores as low as 500 and loans up to 100%

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CREDIT SCORES

WHAT ARE FICO SCORES?

Your credit scores are translated into FICO Scores. What does FICO mean anyway? FICO are credit scores that were developed by Fair Isaac Company, a California company that specializes in construction statistical scoring models. These creidt scores translate into a single number ranging from 350 to 900. The number is calculated using past credit history data. Fair Isaac Developed this scoring model using millions of actual consumer credit data files to develop a complex and secret mathematical algorithm. Since FICO is the developer and owner of the model, it is proprietary, consequently it is impossible to know exactly all of the credit variables considered and how they are weighed by FICO.

Each Bureau calls its FICO scores / credit scores information something different (Equifax-Beacon, Trans union-Empirica, Experian-Fair Isaac). But the score it represents is the same no matter what bureau you use. The risk is defined in the number of accounts that default based on the score. Some example ranges include:

· Credit Scores below 601 yield 8 good loans for each bad one.

· Credit Scores from 700-729 yield 129 good loans for each bad one.

· Credit Scores at or above 800 yield 1,292 good loans for each bad one.

As you can see, overall the credit scores that are generated are a good predictor of a bad loan. They should be used to alert the lender that more investigation is needed, rather than using it to deny a loan.

The credit scores that we supply you is obtained from the bureaus and is based solely on the “raw credit” as delivered to us by Trans Union, Experian, and Equifax. What if your borrower has a number of derogatory items on their credit and they are either reported in error of have been recently settled? It means you will most likely receive a pretty clean RMCR, but the score will be unjustly low because it will continue to reflect the original inaccurate raw credit. The bottom line is that without the rights to the scoring matrix, we have no control over the final credit scores.

The little we do know it that the credit scores model contains 33 variables that were found in combination to be most predictive of an individual's future ability to repay a loan. These 33 variables are grouped by FICO into five categories. They are:

· Previous credit performance

· Current level of indebtedness

· Amount of time that the credit has been in use

· Pursuit of new credit

· Types of credit available

FICO's credit scores model evaluates how these variables interrelate and supposedly how the interaction will likely affect mortgage performance. By evaluating the historical performance of loans with borrowers' credit characteristics, FICO claims they can tell us something about the future performance of loans with similar credit characteristics, i.e. the risk of extending credit .

Accompanying these credit scores are four “reason codes”. These codes identify four of the 33 variables that have the most influence on lowering the credit score. This gives us some insight into the credit scores. Examples of reason codes are:

· Current delinquency

· Too few accounts paid as agreed

· Too many inquiries in the last 12 months

· Proportion of balances to credit limit is too high on revolving accounts

HOW TO GET THE BEST CREDIT SCORES

The best way to keep your CREDIT SCORES good is to pay your bills on time, avoid collections (i.e medical collection) and bankruptcies. If your score is already low, the following is a quick checklist of things that you can do to improve it.

· Pay down any credit cards to below 50% of available credit

· Close all accounts that have ever been late

· Close all but two to three revolving accounts

· Limit the number of inquiries made on your file

· Pay all collection accounts

· Write a dispute letter to the credit bureaus on all negative items

· Credit RepairInformation at Lexington Law

Web sites:    www.experian.com, www.transunion.com, www.equifax.com

Mailing Addresses: Experian (XP) P.O. Box 2002 Allen, TX 75013

                                    Trans Union (TU) P.O. Box 2000 Chester, PA 19022

                                    Equifax (EF) P.O. Box 740256 Atlanta, GA 30374

NOTE: You can go online and pay $9 for your credit report from each of the reporting bureaus. After you have ordered it, you can dispute anything online. It will show you negative and positive entries alike. We recommend disputing all or any negative information as often as you can. If a reporting account on your credit report does not respond within a 30 day time frame, the reporting bureau is then required by law and Section 611 of the Fair Credit Reporting Act to take it off your credit report.

We hope you enjoyed our section on Credit Scores. For the best Credit Repair Information Contact our VIP service at: 248-505-6926. or emial us: info@mortgages-mi.com

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CREDIT SCORES - FICO SCORES

Best Credit Scores and Fico Scores Information - We have loans for credit scores as low as 500 and loans up to 100%

HOW TO GET THE BEST CREDIT SCORES