Monday, April 27, 2009

Credit Score Can affect Home Loan Approval [Part 1]

This is not a good time to have a bad credit rating when looking for a home loan. Many people who have been approved a year ago, are now denied even if they seem to have everything in order. If this is right or not is irrelevant because the reasons are justified. Increased foreclosure rates, because of lose lending standards have ruined the dream of many officials that loan applicants are required to adapt to a growing problem.

The current situation can be compared to what many universities have experienced in recent years due to too many students default. Leave fewer qualifications, to strengthen the restrictions and limitations force the plaintiffs to prove themselves by improving their test scores or attending a community college. Some of these "at risk" students have followed a winding road to graduation and to beat the odds, while others did not.

If you have been refused a loan, do not sweat it, get back to focus on saving money and build your credit. This is not the end of the world, but rather an opportunity to provide more fertile ground for your future home to sit on when the time is right.

FICO Score

The FICO score, from software developed by Fair Isaac and Company, is usually one of the first things that lenders consider mortgage. You have three Fico scores, one for each of the 3 credit bureaus: Equifax, Experian and TransUnion. Each assessment is based on information the credit bureau keeps on file about you.

Important things to know:

• Each credit must contain at least one account that has been open for at least six months

• Each credit should be updated in the last six months

• The national average FICO score is 723

The main elements that make up your FICO credit score:

• Payment History in paying bills on time

• Amount of Debt

• How long do the credit cards are the property

• How many of your new loan application

Please continue reading part 2

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