Monday, July 23, 2007

 

Does your credit score make a difference?

You better believe it. In just the past few weeks I have noticed credit scores dropping on a majority of loan applications I have taken. Keep in mind that a credit score is a reflection of a person's credit. It is NOT entirely how well a person pays bills on time to their creditors.

Credit scores are derived from numerous factors which include the percent of available credit, the percent of used credit, number of open accounts, number of inquires and of course timely payments. In other words, even though you may pay all your bills on time, if the majority of your cards are maxed out, you may have a low credit score regardless if you have never made a late payment in your entire credit history. I have recently had to turn down several clients, ones that have a high income and pay bills on time, because their score was not there. With the collapse of the subprime market and record credit card debt and bankruptcies, Stated Doc and No Doc loans now require higher credit scores than ever.

Excessive credit inquiries made within the same period can drop your score as well. It is a good idea that if you are looking to purchase a car or home to ask the person who pulls your credit for a copy of it. Then if you decide to shop around, supply that credit report instead of getting hit with another credit pull. If a lender is not willing to do that, find somebody else.



Give me a call for any credit or financing related questions. I am here to help.

Lewis Poretz
President
Open Mortgage http://www.openmortgage.com/ 877-345-OPEN

posted by Lewis Poretz  # 7/23/2007 08:39:00 AM

 

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