Saturday, February 24, 2007 10:41 AM
Christopher Smith
Your Credit History: What Lenders Look At To Determine Your Loan Amount!
When you apply for a mortgage with a lender like Jeff Harding (www.iowamortgageguy.com), he, among other lenders is going to check your credit history. You will give the lender your social security number which is the key to unlock your credit history with the three major credit reporting agencies: Equifax, Experian, and Trans Union. When these credit agencies pull up your credit history, there are certain details of your history that carry more weight than others.
Payment History 35%
Amounts Owed 30%
Length of Credit History 15%
New Credit 10%
Types of Credit Used 10%
These percentages are based on the importance of the five categories when determining credit history for the general population. For people who have not been using credit that long, these categories might be slightly different.
See how important the top two factors are in determining your ability to qualify for a loan. Your payment history is huge. Have you had any late payments, defaults on loans, skipped a payment or have you made all your payments on time. The amount owed is also a big one. Have you maxed out your five department store credit cards, your Visa and Discover card, and are you continually shifting credit card debt to the next credit card offer in the mail that offers 0% transfer rates for the first year.
To request a free credit report, go to www.annualcreditreport.com or call 1-877-322-8228. The following list is the credit reporting agencies I was referring to earlier, and their contact information.
Equifax ( Uses whats called a Beacon Score to determine your credit rating)
PO Box 105069, Atlanta, GA 30348, To Report Fraud Call: 1-800-525-6285, Order/Dispute Credit Report: 1-800-392-7816
Visit their website at http://www.equifax.com
Trans Union ( Uses whats called an Empirica Score to determine your credit rating)
PO Box 6790, Fullerton, CA 92834, To Report Fraud Call: 1-800-680-7289, Order/Dispute Credit Report: 1-800-916-8800
Visit their website at http://www.transunion.com
Experian (Uses whats called a FICO Score to determine your credit rating)
PO Box 9532, Allen, TX 75013, To Report Fraud Call: 1-888-397-3742, Order/Dispute Credit Report: 1-888-397-3742
Visit their website at http://www.experian.com
These Credit Reporting Agencies (CRAs) merely provide information to the consumer; they do not collect it. Not all creditors report to each of these three agencies so the scores you receive from each of these agencies will be different.
For more information on credit/debt issues, visit my website www.ChristopherSmithRealtor.com To set up an appointment with one of my preferred lenders, call me at 319-329-5988 or email Christopher@skogman.com. Thank You!