Understanding Your Credit Score

Credit Scoring Guide

The statistical evaluation of your credit score is a numerical rating generated to calculate what your risk factor to Mortgage companies in Cheyenne and Wyoming area will be. Mortgage companies use this number to gauge the likelihood that an individual will repay a loan. The score looks at past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit, and number of inquiries as well as your income to debt ratio. Basically, “can” you repay the loan and “are you willing to repay it” based on your credit history. Scores are calculated as positive and negative items in your credit report and if you have late payments this will lower your score. If you reestablishing a good track record with the creditor and make payments on time it will raise your score likewise.


Your credit report should contain at least one account that has been active, updated and open for a period of at least six months or more. This credit history is vital and ensures that there is sufficient information to build an accurate picture of what your score is. Credit scoring will place borrowers in one of three general categories.

  1. A Borrower with a score of 680 and above may be considered an A+ loan. If you fall into this category you stand a good chance of obtaining a loan, at a lower than the prime going interest rate. The application, approval and final grant process will also be closed in a shorter time frame.
  2. A borrower with a score below 680 but above 620 will indicate to the underwriters that they need to take a closer look at your file to determine the potential risks involved. Additional supplemental credit documentation and letters of explanation may be required before a decision is made. Loan within the FICO scoring range may allow borrowers to obtain “A” pricing, but the loan closing may still take several days or even weeks as it does nowadays.
  3. Borrowers with a score below 620 may find themselves locked out of the best loan rates and terms offered.

Credit scoring Cheyenne Wyoming FICO

 

The most widely used credit scores are the FICO score, which Fair Isaac & Company, a financial analytics agency developed. These scores only take into account the info on your credit reports. FICO do not take into account your income, savings, down payments amount or demographic factors like race, gender, nationality or marital status. This scoring system was developed to assess the borrower’s willingness to repay the loan and specifically excluding personal factors. Credit reporting agencies like Experian, Equifax and TransUnion monitor the following factors.

  • Payment History – Are there any payments later than 30 days.
  • Your credit history – Duration of your credit.
  • Credit card balances – Number of accounts and outstanding balances.
  • Number of enquires on your profile from creditors.

 

Let Joe help you get in touch with a professional mortgage representative today to find out your current credit score, and how it affects the loans you qualify for. Our goal is to get Cheyenne and other Wyoming area residents into the homes of their choice. Don’t worry too much if your credit score isn’t A+. We can work out a loan program that’s just right for you!