We ended last week by talking about the CIA of the lending world. CIA standing for Credit, Income and Assets. As the turmoil in the financial markets continues, lenders require more from you as a borrower when it comes to your CIA.
The Centerpiece of Your Creditworthiness – Your Credit Score
As we explore the components of the CIA in detail, we will start by looking at the centerpiece of your creditworthiness, your credit score. Your credit score is the first impression you send to a San Mateo mortgage lender. Your credit score reflects how you handle debt and a great indication of how you will handle your financial responsibilities in the future. Your credit score can affect every aspect of your San Mateo mortgage. It can determine the mortgage programs available to you, the upfront costs to obtain a San Mateo mortgage and most importantly, the interest rate you receive. Not only does your credit score affect all aspects of your mortgage, but can ultimately be the deciding factor in your loan approval.
How Your Credit Score is Reported
Your credit score can range from 350-850, the higher your score, the better your credit. There are three main credit bureaus: Transunion, Experian and Equifax. Each give you a grade according to what your creditors report to them. More than likely, each credit bureau will have three different scores for you. Some creditors do not report to all three bureaus and each bureau has small variables that differentiate their scoring. To compensate for the difference; a lender will use your middle score from the 3 bureaus in qualifying you for a San Mateo mortgage. Even though there are some differences in the bureaus, they all basically use the FICO (Fair, Isaac and Company) scoring model to determine your credit worthiness.
The Components of Your Credit Score
Want More FREE Information?
We are only scraping the surface when it comes to credit, as I could devote an entire blog to credit and have an endless amount of content. If you want to know more about credit and your credit score send me an email at info@SanMateoMortgageBlog.com and I will send you an audio CD which explains How the Credit Scoring Model Works and my 15 Things You Need to Know About Your Credit Score Handbook.
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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
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