FICO, formerly Fair, Isaac, & Co. and creators of the ubiquitous credit scoring system, has just released a new credit scoring model, FICO 08. Under the new system, borrowers are less likely to be penalized for one-time delinquencies than in the past. Minor collections (original balances less than $100) and one-time late payments two or more years old will no longer lower your credit scores.
It is unfortunate that in today’s economy, debt rules all. From the deepest spots of our wallets, we have charged ourselves to the point of no return. The commercials and ads promising a better car, newer home and more of this and that are all based on lines of credit and bank loans. Our children have been raised in this economy where paying for something means a monthly payment and a low or high interest rate; this is why debt elimination is needed. With debt comes the need for the debt elimination and the strive to become debt free.
As the financial situation has become unpredictable and erratic, non prime loans have taken a nosedived, leaving the investors in a fix. As it is a gamble the investors expect some kind of relief soon. The degree of the gamble has in turn hiked credit prices for borrowers. Initially investors gained considerably from the increase in fiscal growth and the rise in prices of bonds and currencies. But at that time the gamble in the markets was at a very low level and both consumers and markets basked in easy credit facilities.
I was surprised when I applied for a loan recently and found out my score was to low. The lender told me I needed to raise my score 60 points to qualify. I quickly did some research and this is how I was able to raise my score 110 points in less than 60 days.
While most people know that a good credit rating is an important part of being approved for a mortgage loan there are other things that a lender looks at when making the loan decision. When deciding whether or not to approve a mortgage the lender looks at several elements; the credit report is only part of the data they review. For this reason mortgage applicants are required to furnish information that a lender cannot obtain by themselves.
Recently I was applying for a loan and needed to increase my credit score. I needed to get above 650 to qualify for the rate I wanted. My current score was 590. I was able to repair my bad credit fast and got my score to 700 in less than 60 days.
