Posted on: 05th Aug, 2005 06:16 am
Mortgage lenders use a credit score in order to determine whether you can qualify for the loan. The score is based on the information that is provided on your credit report. This score is taken into account while charging the interest rate on your loan. And, if you can maintain your credit score, then you will be saving a huge sum in the interest.
Each and every lender sets his own criteria including the credit score required for approving mortgage loans. Lenders also consider the debt-to-income ratio while judging your financial strength of paying off the loan. Based on your credit score and debt-to-income ratio, lenders provide you with a credit rating that proves how creditworthy you are.
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How do lenders rate you on the basis of credit score?
Each and every lender sets his own criteria including the credit score required for approving mortgage loans. Lenders also consider the debt-to-income ratio while judging your financial strength of paying off the loan. Based on your credit score and debt-to-income ratio, lenders provide you with a credit rating that proves how creditworthy you are.
| Rating | A | B | C | D | E |
| Credit Score | 660 or higher | 620 to 659 | 580 to 619 | 550 to 579 | Below 550 |
| Debt-to-Income Ratio | Lower than 35% | Around 50% | 55% or higher | Around 60% | Around 65% |
| Late Payment | |||||
| Mortgage | No late payment for past 2 years. | 30 days late for once or twice in past 1 year. | 30 days late for 3 to 4 times in past 1 year. | 30 days late for 2 to 6 times and 60 days late for once or twice in past 1 year. | Late for 20, 60, 90 and/or 120 days. |
| Installment Loan | 30 days late for once within past 2 years. | 30 days late for 2 to 4 times during last 1 year. | 30 days late for 4 to 6 times during past 1 year. | Few 90 and 120 days late payments since past 1 year. | Late for 20, 60, 90 and/or 120 days. |
| Revolving credit | 30 or 60 days late for once in past 2 years. | 30 days late for at least 2 times in last 1 year. | 60 days late for 2 to 4 times in last 1 year. | Few 90 and 120 days late payments since past 1 year. | Late for 20, 60, 90 and/or 120 days. |
| Other Criteria | Good credit profile for last 5 years, no bankruptcy within the last 10 years. | No 60-day late payment. Discharged from bankruptcy 4 years ago. | Discharged from bankruptcy 2 years ago. | Discharged from bankruptcy within last 1 year. | Bankruptcy or foreclosure. |
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How do lenders rate you on the basis of credit score?
I don't think it would lower it either, I think if it did it would discourage people from ever checking if they thought they were going to lower their score if they did.
I have my doubts that they will lower your score because you check your credit. I am thinking that it is for the hard inquiries only.
Agreed.
I agree. They have where you can pay one price and look at your score as many times a year as you want. I doubt places like equifax and the others would offer this if you were penalized everytime you looked.
right, but I am not sure how many times you can look at it if you pay for it, I know if you get the free report it is only available for thirty days.
Thirty days is the max for the freebies but you can look at them as much as you would like to if you are paying for it.
Have you purchased your score? How do you know this is the case?
I have purchased my score and paid a small monthly monitoring fee, it was part of the package. you can access these services right on the credit reporting agencies, they all have reputable companies on their website that you can pay the monthly fee to and have access to your score when you want it.
How long did you continue to be part of the program that let you monitor your score and was the monthly fee a lot? I would assume that since they are on the credit reporting agency pages that they are trustworthy right.
For about six months is all it took, you pay a small fee a month and you can monitor, pull your score and your credit report.
I will go back to the pages and see what is available. Maybe I will try one of them for six months, have to see what their fees are, you did not mention how much it cost.
There are different plans depending on what you want to do, you can get the very basic plan that just give you access to your credit report onto the a larger plan that runs around $20 a month, which you can get more services and then they get bigger and bigger, depending on what services you actually want. you would have to go there and check it out.
That sounds like a pretty good plan. I see their are starting to be numerous companies popping uo to offer services like these. It is a little scary for a couple reasons. 1. That the world of scammers have become so large that you need a service like this and 2. Making sure you don't hire a bogus company who will use your information wrongly. the credit bureau ones would be less risky.
We JUST finished our bankruptcy. We have zero debt and pay our bills on time. We have stable jobs and make a decent income. Will we be able to get a good mortgage rate? Will we be accepted for a mortgage? Except for the bankruptcy, we are squeaky clean financially.