Home > Free Credit Report >
Online Credit Report > Online Credit Report: Can A Score Put you In A New Home?
Online Credit Report: Can A Score Put you In A New Home? |
|
In 1995, major mortgage investors endorsed
Fair, Isaac credit bureau risk scores as part of the underwriting process and since then scoring has taken giant strides in the world of mortgage lending.Online credit report scores are effective tools that, in an unbiased manner, help separate loans that are likely to perform well from loans that are less likely to perform well and ensure the continued availability of mortgage money to all creditworthy borrowers. They also help mortgage lenders to promote this goal and they can be used effectively in efforts to expand home-ownership opportunities to underserved households. Apart from helping mortgage borrowers, online credit report scoring is also very beneficial for other industries as it provides faster service, less paperwork, and often a greater chance of being approved. Fair, Isaac has provided an objective and accurate risk assessment tool in the form of online credit report scoring, which portrays your credit risk scenario at any particular time. Lenders use this number to decide whether they would be able to get back the money that they would be giving out as a loan. The software used by banks and credit bureaus to generate scores is developed by Fair, Isaacs but they do not calculate the credit scores, nor do they have access to them. On receipt of an application for a loan, the bank approaches one of the major credit bureaus for an online credit report score. Fair, Isaac's software is then used by the credit bureau to calculate a score from the available information and then it is communicated to the bank or the lender. The advantage of Fair, Isaac's products and services is that it removes guesswork, inconsistency and misconceptions from the operations of the lenders. As such, each applicant receives an unbiased appraisal based on relevant information. The online credit report score, which is complied at the three major credit-reporting bureaus--Equifax, TRW and TransUnion, is completely blind so far as nationality, race, ethnicity, age, sex, marital status and religion, as well as income are concerned. It does not discriminate between whites and blacks, as was the case till the early 1970s, when some lenders in the U.S. preferred white applicants in terms of offering mortgage loans. Relevant applications were marked with an N or an S, for Negro or Spanish. The situation has completely changed now as data from various credit sources--banks, stores, car dealerships--are pooled in blind fashion and employees at the bureaus are completely unaware of what information gets what weight. It is only the score that provides an index of risk. Discrimination has been completely done away with. The online credit report score itself is not the only deciding factor in being granted a loan or getting rejected for the same. Although there is no hard and fast rule regarding the ideal score, anything below 620 is considered high-risk. It is appreciated by lenders that low scores can be the result of many factors and they have listed about 35 of them--ranging from amount owed on accounts is too high to too many inquiries last 12 months. Payment performance, use of credit and file history are the categories that are assessed. Out of these three, past payment performance carries the most weight as it is the most predictive of these characteristics. Young borrowers or immigrants are judged against those with similar credit histories using predictive patterns of credit risk and they do not get low scores because of their relatively new credit histories. It is always a good idea for home buyers to learn as much as they can about their online credit report and credit scores before they apply for a loan. If there are any mistakes or inaccuracies in the credit report, these cannot be corrected immediately as it will take some time to have them eliminated. Similarly, some negative information can be removed with the help of the creditors, but that too takes time. Corrective action should be undertaken immediately. |
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
|
|
|
|
| ------------------------ |
|---|
|
| ------------------------ |
|---|
Custom Search
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
Consumer Alerts | About | Bookmark Us | Contact | Espanol | Privacy Statement | Copyright | Terms & Conditions | Financial Widgets | SiteMap
Copyright © 2006 Credit Loan, LLC. 235 APOLLO BEACH BLVD, STE 218 Apollo Beach, Florida 33572 All rights reserved.
Disclaimer: The content provided on CreditLoan.com is for informational purposes only; do not make any financial decisions based on its content. Financial decisions are personal, based on an individual's situation. Consult with a financial professional before making any financial decisions. CreditLoan.com is not liable for your financial actions.
