Secrets of Credit Score Part 7

Fair Isaac makes its money by selling the FICO scores on individual consumers to banks. When your bank buys a credit report from a CRA like TransUnion, it also buys the FICO score calculated from the TransUnion report. Fair Isaac and Company, which developed the score, felt that the score would only confuse consumers since there was nothing to tell them what it meant or what lenders were looking for.

Fair Isaac’s Global FICO Score applies the company’s industry-standard FICO credit risk scoring technology to rank-order consumers according to their credit risk. Designed to be consistently scaled across credit bureaus and across national borders, the score has established a global standard for consumer credit risk assessment.

Credit scores are also made use of by credit card companies. In case your application for a credit card is turned down than the reason is a low credit score. Credit scores are determined by a number of factors. Each of these factors contribute to a potential lender's view of how likely you are to pay back your loan on time. Credit scores are random. Anyone who checks their report score religiously every day would tell you that.

CREDIT SCORES are more important than ever in obtaining a good mortgage rate. If your score is lower than 630, you should inquire about an FHA Insured mortgage loan. Credit scores are a factor in the amount of security deposit you will have to pay for your telephone, electricity or natural gas service. Your credit score also has an important impact on the interest rate you will pay when you borrow money. Credit scores are fluid. They can be lowered by the credit bureaus if you have late payments.

Credit scores are extremely important for consumers looking for a loan, credit card, or mortgages. Often times these credit scores are the only piece of information looked at when processing a loan request. Credit scores are based in part on the portion of available credit a consumer uses. If a lowered credit limit means a customer’s account balance exceeds 50 percent of the limit, the customer’s credit score may decline. Credit scores are being used for everything these days, including mortgages, credit cards, and insurance and even employment decisions. Your credit score can be the number one thing that causes a credit company to say "yes" or "no" to your credit application.

Credit scores are used for loan approvals, determining interest and insurance rates, when screening for employment and rental applications, and even determining eligibility for cell phone contracts. But not everyone knows how credit scores are determined - and this is important to know. Credit scores are based on formulas. Formulas are not racist. Credit scores are offered by three bureaus viz. Perfect credit score is 850 while minimum credit score awarded is 350.

Credit scores are used by lenders to help them make decisions about who should receive credit and what are the appropriate terms of credit. Computer models take the information in a consumer’s credit report, and calculate a three-digit number. Credit scores are fluid numbers that change as the elements in your credit report change. For example, payment updates or a new account could cause scores to fluctuate.

Payments include monthly bills such as credit card and utility bills as well as loan repayments. Much of the information that is used to calculate your credit score is found in your credit report. Payment history includes whether required payments were made on time, and if they were late, by how much. Were the delinquencies recent?

Mortgages lenders usually penalize you 15 days after the due date. Mortgage lenders consider the middle score - the one that comes in between the maximum and minimum scores you receive from the bureaus. But often lenders may not use the middle score in order to evaluate your creditworthiness. Mortgages and auto loans usually count for more on your credit score than other debts because they are bigger debts, and in most cases you have them longer. Consequently, they demonstrate your ability to pay better than do things like your cell phone bill.

Actually you may be able to get a "free" credit score with the purchase of other services. According to a recent survey; 92 percent of all insurance companies use credit information when underwriting new policies. It is important to note that a credit score is just one of several underwriting tools; they also consider rating variables such as driving record, type of vehicle, where you live, your gender, your age, and other factors.

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Gurmit loves travelling; he has been over 70 countries. He speaks fluent Cantonese, Polish, Hindi, Punjabi and English. Gurmit is an author, writer, insurance and mortgage expert. He frequently writes on various topics of interest to his readers. Gurmit Singh is a licensed mortgage expert with Dominion Lending Centres Mortgage Villa.

Gurmit Singh, mba
Mortgage Expert
M08009905
Dominion Lending Centres Mortgage Villa (11574)
Email:gurmit@gurmitsingh.ca
Website: http://www.gurmitsingh.ca