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Good credit is more important than ever, if you want to get an Inland Empire real estate loan.   Knowing what’s on your credit report and how lenders view various aspects of your report is crucial.

First Things First

Get a copy of your credit report from all three of the credit reporting companies: Equifax, Experian, and TransUnion.  You are entitled to one free report every year from each of the three credit reporting companies.  Whether you’re considering getting a loan or not, you should always take advantage of that opportunity to make sure your credit reports are accurate.

Range

FICO® scores range from 365 to 840.  While the standards for what lenders consider a “good” FICO® score changes constantly and varies by lender, here’s a general breakdown of today’s standards:

• Over 750 is excellent and should get you the best terms and rates. 
• Under 600 might get you an Inland Empire real estate loan, but you’ll want to shop for the lender who’ll give you the best rates and terms.
• Under 500, you need to brace yourself for waiting until you get your credit in better condition.

What Determines Your Score

There are many things that can affect your score.  Magically (or not), each of the three companies tend to view things just a little differently, which means your score will not be the exact same for all three. That’s why it's so important to get copies of your report from all of them.  However, the two main things that all companies consider in rating your credit score are delinquencies and debt-to-income ratio.

What You Can Do To Immediately Improve Your Score

• Check the entries: Make sure any debts or delinquencies listed are true. Report any errors.
• Pay off debts: But do not close accounts.  Having available credit is good as long as it doesn't look like you’re over-extended by having your credit maxed out.  The lender may worry that you’re living off your credit and can't afford your bills.

If you would like more tips on how to improve your chances of getting an Inland Empire real estate loan, I can help. Call me today at (909) 938-9568 or email me at Randy@TeamCharlton.com for more information.

Brought to you by Randy Charlton of Keller Williams Realty.

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If you’re looking to buy a house within the next 12 months, why not make one of your resolutions one that will improve your financial situation and position you as an ideal home buyer? That’s right – we’re talking about your credit score.

The lending world has changed considerably since the boom days and so has the credit score required to qualify for a loan, not to mention a low interest rate. "About two years ago, you could have had a score of about 620 or so to get a lender's best rate on something. Now, lenders are really looking at a rate of 760 at the least,” said Kelli Grant with SmartMoney.com. First-time homebuyers fare much better, needing a credit score of at least 660 unless they try for an FHA loan. The truth is, to be a “good” buyer in the eyes of lenders you need to keep a close watch on the state of your credit score. Here are several tips to maintain and improve upon your current number.

Get copies of your credit report--then make sure the information is correct.  Go to www.annualcreditreport.com.  This is the only authorized online source for a free credit report.  Under federal law, you can get a free report from each of the three national credit reporting companies every 12 months.

How many and what types of credit accounts do you have?  Many credit-scoring models consider the number and type of credit accounts you have.  A mix of installment loans and credit cards may impove your score.  However, too many finance company accounts or credit cards might hurt your score.  To learn more about credit scoring, see the Federal Trade Commission's website, Facts for Consumers.

Beware of credit-repair scams.  Sometimes doing it yourself is the best way to repair your credit. The Federal Trade “Credit Repair: How to Help Yourself” explains how you can improve your creditworthiness and lists legitimate resources for low-cost or no-cost help.

Source: http://www.federalreserve.gov/pubs/creditscore/default.htm

Brought to you by Randy Charlton of Century 21 Home Realtors.

We all know by now that the higher your credit score the better, but do we really know how it all works? I found a great article that explains not only how credit scoring works, but what the future holds for the credit scoring model.

Brought to you by Randy Charlton of Century 21 Home Realtors.