It is commonly believed that Fair Isaac, the inventor of a
prevalent credit-scoring model, might be a good place to
start to get some reliable and useful information. Wrong!
Here are some non-answers to questions taken directly from
a FAIR ISAAC publication:
*QUESTION: If derogatory information is removed, how much
will the score increase? ANSWER: "...it is not possible to
estimate how much the score will change..."
*QUESTION: What would happen to the score if an applicant
were to pay off his or her balances and/or close some
accounts? ANSWER: "It is not possible to ensure that credit
scores would increase in this case."
*QUESTION: Do inquiries affect the credit bureau score?
ANSWER: "...inquiries may or may not be a factor in the
score..."
Get the picture? These answers are not really evasive. The
truth is, there are 60 different factors that are used in
determining credit score. The mathematical formula utilized
is very complex, so it's extremely difficult to predict how
isolated factors will affect a particular score. Generally,
the borrowers with the highest credit scores probably hold
these things in common:
*They use credit sparingly. *They always pay on time.
*Their credit accounts have not been recently opened. *They
have not been in pursuit of new credit.
How would you like to have the answers to these questions?
*How can using more credit raise my score? *How can paying
off collection accounts lower my score? *When does opening
new accounts raise my score and when does it lower them?
*Which accounts should I pay off to raise my score the most?
There are extra steps you can take to raise your credit
score almost immediately. If executed properly these steps
end up saving you a fortune if it qualifies you for a
better mortgage at a lower rate. This is just another
advantage of working with professional mortgage broker who
cares rather than responding to countless Internet, phone,
and mail solicitations thinking that banks are "competing
for your business."
Here is a series of considerations for determining what
mortgage lender to use:
1.Check references
2.Look for testimonials
3.Get expert advice
4.Do not pay application fees
5.Do not borrow more than you can pay back
6.Find out how long the loan officer has been in business
7.Have they kept up on the latest fraud prevention courses?
8.Deal with someone local to the area you are buying in. It
is easier to resolve problems with someone you can meet
face-to-face vs. talking with someone in another state.
9.Make sure that they are telling you how much they are
making on the loan. Make sure they discuss how they are
paid. If they are a broker they will have to disclose
closing costs and yield spread premium.
10.Find out if they are licensed. Mortgage brokers and loan
officers that work for mortgage brokers require a license.
Mortgage bankers that work for banks or credit unions do
not require a license.
11.Find out what percentage of clients are from
repeat/referral business. This will give you a good idea on
who you are dealing with. See if they will give you the
name and number of a closed client.
Knowing how to choose a professional will ensure that you
have a greater comfort level while purchasing your dream
home.
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AnaLise Kaufman is a writer and the Managing Director of
Majestic Help. Majestic Help represents many clients in a
variety of industries. For more information please view our
website at http://www.majestichelp.com or email us at
info@majestichelp.com.
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