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Credit scoring places you in one of three
general categories.
If
you have a FICO score of 680 or above, you may be
considered an A+ borrower. Your loan will involve basic
underwriting, probably through a computerized automated
underwriting system and could be completed within minutes. If you
are in this category, you have a good chance of obtaining a low
interest rate and closing your loan quickly.
If you have a FICO score below 680 but above 620, an
underwriter will probably take a closer look at your file to
determine potential risks. If you are in this category, you may
find the process and underwriting time no different than in the
past. Supplemental credit documentation and letters of
explanation may be required before an underwriting decision is
made. You may still be able to obtain "A" pricing, but
loan closing may take longer than if you had a higher
score.
If you have a FICO score below 620, you may not be
eligible for the best loan rates and terms offered. Mortgage
professionals may divert you to alternate funding sources other
than Fannie Mae or Freddie Mac. You may find loan terms and
conditions less attractive than "A" credit loans, and
it may take some time before a suitable funding source is
located.
If you do have negative information on your credit report, such
as late payments, bankruptcy, or too many inquiries, your best
strategy may be to pay your bills and wait. Time is often your
best ally in improving credit.
The length of time to rebuild your score depends on the reason
behind your low score. Most decreases in scores are due to the
addition of a new element to your credit report such as a
delinquency or an inquiry. These new elements will continue to
affect your score until they reach a certain age. Delinquencies
remain on your credit report for seven years. Most public record
items remain on your credit report for seven years, although some
bankruptcies may remain for 10 years and unpaid tax liens remain
for 15 years. Inquiries remain on your report for two
years.
While many lenders use these scores to help them make lending
decisions, each lender has its own strategy, including the level
of risk it will accept for a certain loan product. There is no
single "cutoff score" used by all lenders and there are
many other factors used to determine your eligibility and
interest rate.
By law you can order your credit reports at least once a year
for FREE. This will allow you to see exactly what's being
reported about you by the credit bureaus.
EQUIFAX INFORMATION
SERVICES, LLC
P.O. Box 740256
Atlanta, GA 30374
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TRANSUNION,
LLC
Post Office Box 2000
Chester, PA 19022
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EXPERIAN
INFORMATION SOLUTIONS, INC.
National Consumer Assistance Center
P.O. Box 2104
Allen, TX 75103
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Contact Ben Borden at Virginia Mortgage Bankers, LLC and I will give
you a tri-merge credit report with your credit score for
free! Call us at 804-282-8808. Or contact us via email.
Start
now by filling out our secure online application for mortgage
loans! Call us at 804-282-8808, Monday through Friday from
9 a.m. to 5 p.m. Eastern time!
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