Welcome to the DevoreRealtyGroup.com Blog

2012-05-26 08:00:49
Improving your credit score

To avoid another real estate bubble, many lenders have tightened their mortgage requirements.  According to a report by the Federal Reserve, a majority of banks are less likely to offer loans to people with a FICO score of 620 and a 10 percent down payment than they were in 2006.  Lenders were also less likely to do so even for those with a score of 720.  The good news though is there are some tactics that consumers can employ to raise their scores.

Making sense of the story

  • First, it is worth noting that median credit scores are rising, as people reduce debt and spend less in tight economic times.  Some 18 percent of Americans now have scores of 800 to 850, while 15 percent are below 550, according to FICO data.
  • Often lenders will review FICO scores from the three big credit agencies, and they use the middle number to evaluate the borrower.  That number becomes the borrower’s “risk number.” 
  • Borrowers can figure out their risk number by obtaining their three credit reports, available free once a year at AnnualCreditReport.com, and studying them carefully for errors or omissions.
  • According to FICO, the two biggest factors in a credit score are payment history, which accounts for 35 percent of the score, and the amounts owed, accounting for 30 percent.
  • Knowing that information, one can raise his/her credit score by reducing balances on credit cards.  However, if an account is in collection, it is too late to improve the credit score by paying it off.  The notation that an account is in collection is what lowers the score, so consumers may get more mileage by paying down active credit-card balances and other debts first.
  • Though mistakes and bankruptcies may stay on a credit report for seven years, lenders will generally be more likely to overlook late payments that happened two or more years ago than more recent ones.
  • Improving one’s credit score could take three to four months, or it could take as long as 18 months.
 
Blog Archive
2018-11-13 08:33:28
Economists weigh in on the real estate market

2018-10-28 07:52:37
Why waiting to buy can hurt your retirement

2018-10-21 07:41:53
The number one reason for mortgage declines

2018-10-06 07:16:58
The holidays may decide the fate of the housing market

2018-09-01 08:26:06
What will affect home values?

2018-08-18 05:54:04
Housing tipping to buyer's market

2018-08-18 05:48:22
Why Prop 5 restores fairness to tax system

2018-07-17 07:01:00
Is a 'Generational Housing Bubble' Taking Shape?

2018-06-08 06:17:19
How high will home prices go?

2018-03-08 05:34:07
Are Homes More Affordable Than We Thought?

2018-01-11 19:28:02
What home sellers can expect in 2018

2017-12-29 20:54:32
Most say tax law will change their plans to buy a home

2017-12-27 13:58:35
SD home prices rising at third-highest rate in nation

2017-12-22 08:07:11
5 Changes Under the New Tax Law

2017-12-15 06:41:40
No Housing Bubble...Yet

2017-11-03 06:56:40
San Diego home price increases outpace nation

2017-10-13 06:39:37
Homebuyers rush to riskier mortgages

2017-09-29 06:25:25
Why It's a Better Time for Buyers on a Budget to Purchase a Home

2017-09-03 11:28:07
My newfound purpose

2017-07-09 12:31:06
Is it time to sell, San Diego?

2017-07-04 07:59:54
The American Dream

2017-04-21 06:42:10
Why are renters staying put?

2017-04-20 06:49:29
Homeowner Value Estimates vs. Appraisals

2017-04-09 07:26:48
San Diego 8th Hottest Real Estate Market

2017-04-03 13:29:11
8 Questions to Ask When Deciding to Rent or Buy

Click here to see ALL articles.


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.