Whether you are purchasing or refinancing a Palos Verdes home, your credit score will determine both the ease of qualifying for a loan as well as your interest rate. Do you actually know what a credit score is and how it is determined? Or do you just follow along not quite understanding? RIS Media’s Real Estate Magazine recently shared the following information:
– Your credit score is technically a statistical method of assessing your ability and likelihood to pay back your debt (creditworthiness).
– Credit scores are based on several different factors, including your payment history, amount of outstanding debt, length of credit history, use of new credit and types of credit used.
– Credit scores are primarily based on credit report information, which is typically sourced from credit bureaus.
– Credit scores often come from any of the three largest credit bureaus in the U.S. (Experian, Equifax and TransUnion).
– Credit scores range between 300 and 990, depending on the scoring system and algorithms used (i.e., FICO, NextGen, CE Score and VantageScore).
And there are changes on the horizon after the first of the year. According to Kenneth R. Harney in his recent LA Times article, “..VantageScore 2.0 which is expected to be rolled out nationwide to lenders in January, focuses on the subtle warning signs of credit stress that might have been missed earlier and penalizes or rewards consumers with higher or lower risk scores than they would have received before.” Click here to read full article.
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