|
< Read Another Article
Your Credit & the Credit Bureau - Part IIIWe have learned previously how credit bureaus and Fair Isaac, Company, started. In our final report we will cover more scoring factors and take some of the myth out of monster in credit reporting.In today's technologically advanced era we are seeing anything and everything possible being performed by a computer. These computers are our little friends and can be our greatest foes. But, in the mortgage industry they are definitely our good friends. Most notably, a computer cannot discriminate. Scoring model templates and FICO scores do not consider race, nationality, religion, age, or other prohibited factors in your score! Indeed, they are prohibited by law to do so. Credit scoring is governed by The Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA). These acts help ensure that your approval will be based chiefly upon the likelihood of repayment. Since credit scoring is highly computerized, and since lenders are relying more and more on credit scoring, loan approvals can be turned over in as little time as thirty minutes! Notwithstanding, underwriters still make the final decision. Even after issuing a loan approval it is not uncommon to have some conditions to your loan closing. This may be a recent paycheck stub, a bank statement, or quite literally a host of other items. Still, you have loan approval. This becomes a significant advantage for you and your Realtor that will aid your cause as a seller reviews multiple purchase contracts from perspective buyers. But let's back-up for a moment. What if you are denied due to your low score? Should you give up looking for that home? Absolutely not. After all, mortgage lenders want to make consumers loans. That's how they make their money. And your FICO credit score is not a grade of past history even though it is based upon history. Rather, it is a predictor of future performance. This is why you have a loan agent and this where they can step up to the plate and really make a difference. He/she will know what to do. A nominal FICO score or even a poor one will not haunt you forever. The score is only a snapshot of the lender's potential risk at a particular point in time. A good loan agent can help write letters of explanation on your behalf and help clean up erroneous information. They have the knowledge of what to do, how to write letters, make phone calls, and they are aided also by new amendments made in 1996 to the Fair Credit Reporting Act and new procedures recently instituted at the bureaus. Remember that a computer does not make the final loan approval. In the end, a well-written letter of explanation of some set of circumstances (unbeknownst or unavoidable) can make the difference in your loan approval. There are three national credit repositories that can provide you with a copy of your credit report.
For more information on mortgage credit bureau scoring, visit the Fair Isaac, Co., web-site at www.FairIsaac.com/mortgage, or call Rich Young at Action Residential Mortgage at 800-459-9872. Also, extensive financial calculators and other consumer related information is available at the Action Residential Mortgage website at www.ActionMortgage.com.
|
Action Home | Financial Calculators | Interest Rates | "Easy App" | Mortgage Library | Newspaper Articles | Contact Us