My plan is to provide helpful information to buyers, sellers and those of you who just like to look at websites about houses. So here I go. After you read it, shoot me an email with your thoughts, comments and questions about real estate.
The Most Common Credit Score Terms Are:
The Most Common Credit Score Terms Are:
FICO score: FICO is an abbreviation for Fair Isaac Corporation and refers to a person’s credit score based on credit history. (Fair Isaac Corporation was named after its founders, Bill Fair and Earl Isaacs.) Lenders, wireless providers, landlords and credit card companies use the number to decide if the person is likely to pay his or her bills. Many employers are also checking credit reports of potential employees. A credit score is evaluated using information from three major credit bureaus and is usually between 300 and 850.
“A” Loan or “A” Paper: a credit rating where the FICO score is 660 or above. There have been no late mortgage payments within a 12 month period. This is the best credit rating to have when entering into a new loan.
“B” Loan or “B” Paper: FICO scores from 620-659. Factors include two 30 day late mortgage payments and two to three 30 day late installment loan payments in the last 12 months. No delinquencies over 60 days are allowed. Should be two to four years since a bankruptcy. Also referred to as Sub-Prime.
“C” Loan or “C” Paper: FICO scores typically from 580 to 619. Factors include three to four 30 day late mortgage payments and four to six 30 day late installment loan payments or two to four 60 day late payments. Should be one to two years since bankruptcy. Also referred to as Sub-Prime.
Currently in the real estate world, 580 is the magic number for FICO scores. If your score is less than that, you will need to bring a down-payment of 10% to the closing. We are also seeing more lenders looking for a credit score closer to 740 for the “A” loans.
MYFICO.COM and CREDITKARMA.COM are two websites you might want to visit to find out more about YOUR credit score.
