Posts tagged FICO

See How Credit Missteps Lower Your Credit Score

0
577 days
by in Credit Scoring

The FICO Recipe

The company behind the popular FICO scoring model has published a “What If?” series for common, specific credit missteps.

If you’ve ever wondered how your credit score would be affected by a missed payment or a maxed-out credit card, now you can use a look-up guide to assess the probable damage.

As published by myFICO.com, here’s a few common financial difficulties and how they affect FICO scores.

Max-Out A Credit Card

  • Starting score of 780 : 25-45 point drop
  • Starting score of 680 : 10-30 point drop

30-Day Delinquency

  • Starting score of 780 : 90-110 point drop
  • Starting score of 680 : 60-80 point drop

Foreclosure

  • Starting score of 780 : 140-160 point drop
  • Starting score of 680 : 85-105 point drop

Not surprisingly, the higher your starting score, the more each given difficulty can drop your FICO.  This is because credit scores are meant to predict the likelihood of a loan default. People with lower FICOs are already reflecting the effects of risky credit behavior.

Also worth noting that the above is just a guide — your scores may fall by more — or less — depending on your individuak credit profile.  The number and type of credit accounts you hold, plus their respective payments and balances make up your complete credit history.

Read the complete report at myFICO.com.

7 Ways To Protect Your Credit Score For Better Mortgage Rates

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835 days
by in Credit Scoring

As mortgage lenders tighten approval standards   in North Carolina and nationwide, the importance of a good credit score is rising.  Credit scores not only make the difference between a mortgage approval and mortgage turn-down, but they also play a large role in determining your actual mortgage note rate.

In the 3-minute piece, the NBC Today Show talks about 7 ways that homebuyers ruin their credit — often by accident.  Some of the highlighted mistakes include:

  • Closing open credit cards
  • Making appliance buys on credit prior to closing
  • Asking creditors to lower credit balances prior to closing

In general, a 740 FICO will insulate a borrower from the higher costs and/or rates associated with low credit scores.  Below 740, though, every 20 points adds to the damage.  Watch the video and apply what you can to your own situation.  The more you know, the more you can save.

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