Posted on 06/09/2016 10:03:29 PM PDT by Graybeard58
No number is more important to prospective home buyers than their credit score. Put simply, these three digits are a numerical representation of your track record paying off your debts, from credit cards to college loans. If you’ve applied for a mortgage to buy a home, lenders check your credit score. If it’s high, getting a mortgage will be a breeze; if it’s low, you may struggle.
So now that we’ve got your attention, the question remains: Exactly what is a good credit score?
Here’s the deal: A perfect credit score is 850. But all scores 760 and above are considered to be in the best credit score range. Since this means you’ve shown an excellent ability to pay off your past debts, mortgage lenders want your business—and will try to entice you by offering loans with the lowest interest rates, says Richard Redmond, mortgage broker at All California Mortgage in Larkspur and author of “Mortgages: The Insider’s Guide.”
A good score is from 700 to 759; a fair score is from 650 to 699. Since a lower score means you’ve had some late payments or other dings on your credit history, lenders see you as more likely to default on your home loan. They may still give you a mortgage, but at a higher interest rate, says Bill Hardekopf, a credit expert at LowCards.com.
Credit scores below 650 are deemed poor, meaning your credit history has had some rough patches. This doesn’t necessarily mean you can’t qualify for a loan, but it may be tough, and you’ll pay a higher interest rate for the privilege.
How credit scores are calculated
Three major U.S. credit bureaus track and tally your scores: Experian, Equifax, and TransUnion. Their scores should be roughly similar, although each pulls from slightly different sources (Experian looks at rent payments while TransUnion checks out your employment history). But by and large, here are the main variables that determine your score, and to what degree: •Payment history (35%): This is whether you’ve made debt payments on time. If you’ve never missed a payment, a 30-day delinquency can cause as much as a 90- to 110-point drop in your score.
•Debt-to-credit utilization (30%): This is how much debt you’ve accumulated on your credit card accounts, divided by the credit limit on the sum of your accounts. Ratios above 30% work against you. So if you have a total credit limit of $5,000, you will want to be in debt no more than $1,500 when you apply for a mortgage.
•Length of credit history (15%): It’s beneficial to have a track record of being a responsible credit user. A longer credit history boosts your score. CreditKarma.com, a credit-monitoring service, found that its members with scores above 750 have an average credit history of 7.5 years.
•Credit mix (10%): Your credit score ticks up if you have a rich combination of different types of credit accounts, such as credit cards, retail store credit cards, installment loans, and a previous mortgage.
•New credit (10%): Research shows that opening several new credit accounts within a short period of time represents greater risk to the mortgage lender, according to myFICO.com, so avoid applying for new credit accounts if you’re about to buy a home. Also, each time you open a new credit account, the average length of your credit history decreases (further hurting your credit score).
How to check your credit score
You can check your own credit report—and should, because it will help you pinpoint areas for improvement. Even if you’re fairly sure you’ve never made a late payment, one in four Americans finds errors on his credit report, according to a 2013 Federal Trade Commission survey.
Errors are common because creditors make mistakes reporting customer slip-ups. For example, although you may have never missed a payment, someone with the same name as you did—and your bank recorded the error on your account by accident.
We received a late fee balance on a card we NEVER used. They charged us a fee, then charged us a late fee then sent us notice. THAT was when we found out about the card fee in the first place.
I called them, got NASTY people telling me how evil we were. Had them put the manager on and He ALSO was nasty until I informed him the card had never been used! He changed his tune cleared all the fees and late charges then proceeded to try to sell me on how good the credit card company was and would I like to have one. I asked if he was kidding me!
Same here. Did suff in my youth I still regret.
Yeah, can't steal anything from THEM, right?
I don't steal from anyone.
I try to pay as little as possible, and the seller factors in the realtor's commission. If the seller doesn't have to pay that, I don't have to pay as much. Also, I have found that many real estate agents are somewhat ignorant about negotiations and can hinder rather than facilitate a deal. And occasionally a realtor refuses to wait for the commission and wants it up front, and that's much less deposit for the seller who is willing to finance, and several thousand dollars extra that I must pay up front.
Cash is to be used as leverage and incentive, so I try to avoid situations where it gets vacked up by third parties.
That's just one angle. There are many more. I've heard that your typical family (whatever the h3ll that means these days) can qualify for public assistance producing cash and non-cash benefits equivalent to a household earning about $60K annually, which is where I happen to be with full-time work.
If you look at what gets purchased with EBT cards in the supermarket line, I'd estimate close to two-thirds are buying stuff we can't afford and, as often as not, driving off in vehicles we can't afford either.
Even the blue collar production guys at the plant where I work notice this and wonder why they haul their bones out of bed every morning to work our 12 hour shifts when they see neighbors with fake disabilities and the like working the system for more.
To actually close one you must write to the company and request that it be closed and let them know that by law,. they must send you back an acknowledgement by U.S. mail.
Otherwise your account will remain open indefinitely and if later they decide to charge a fee, you will be billed for it.
I had a personal experience once trying to close an account by phone, the guy tried and tried to talk me out of it but I wouldn't budge. He finally gave up and said, "OK, I'll close the account"-- He lied. I wound up closing it the way I described above.
Yes makes sense, For my instance this card company got my name from another company that SOLD our name to them. The “card” never was activated so there was no acct to close.
The banks charge merchants a minimum of 03%, so we both are making money.
I tried to buy a new car on the credit card and pay it off at the end of the month but the dealer wouldn’t go for it.
Our Chase Visa does similar. They urge you to cash in for gift cards but we periodically have them put it against our account. Since we use it for everything, it builds points pretty quick, but you already know that.
Car dealers won't take the automatic loss for what the credit companies charge - at least they haven't built in even more margin like all the other retailers....I did get one to accept a earnest money credit card payment to hold a car once, but it was only $100.
When I bought my last car, I drove to the bank and got a cashier's check to take back to the dealer. I actually had my credit company limit my normally available credit for security - If I need more, I can call them and have it bumped for the purpose. The last time I paid interest, I had actually got my payment to them a few days before the cutoff on the bill - I sent a note that if I ever got charged interest again like that, I would take my business elsewhere and they'd lose out on a sure take on x-thousands of dollars charges per year. Been over 10 years....
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