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FICO Score 101 - what does your FICO score mean to you
from: Delia GalleyFICO stands for "Fair Issac Corporation," the company that invented the FICO scoring system. Your FICO score is a number generated by one of the three Credit Report Agencies (Equifax, TransUnion or Experian) based on your credit history. This number helps lenders to predict how likely you are to pay your loans on time in the future. A FICO score will range between 300 to 850. The higher your score, the less risk you represent to a lender. Generally, FICO scores below 600 indicate a higher risk to creditors and could cause a lender to charge you a much higher interest rate or turn you down for a loan. According to the Fair Issacs Corporation, approximately 14% of credit worthiness Americans have a FICO score of below 600. This example illustrates how a FICO score can affect "real" life experiences.
Bob has a FICO score of 600 and applies for a home mortgage loan. Mary also applies for a home mortgage loan and has a FICO score of 720. According to the Fair Issacs corporation, Bob would likely get an interest rate of 8.531%, while Mary would get an interest rate of 5.702%. On a $300,000 mortgage loan, Bob's monthly payment (principal and interest) would be $2,313 while Mary's monthly mortgage would be $1,742 - a whooping difference of $571. I don't about you but I could surely use an extra $571 in my bank account at the end of the month.
What goes into my FICO Score?
Payment History - 35% of score.
* Did you pay your bills on time?
* Does your file reflect a bankruptcy, lien, wage garnishment, collections, delinquent accounts?
* How many past due/delinquent accounts do you have?
* How severe is the delinquency (30, 60, 90 days... past due)?
* How long has it been since the accounts were delinquent?
Amount owed - 30% of score.
* How much is owed on your accounts?
* How many of your credit lines are being used?
Length of Credit History - 15% of score.
* How long have your accounts been opened?
* How active are the accounts?
New Credit - 10% of score.
* What new accounts have been opened and what types are they?
* How many recent inquiries have been made against your credit?
* Is there evidence of re-establishment of positive credit?
Type of Credit - 20% of score.
* What is the number of the various accounts (major credit cards, retail cards, mortgage, equity lines of credit, etc)
What does NOT go into your FICO Score?
* Race, color, religion, national origin, sex, marital status
* Age
* Salary, occupation, title, employer, date employed
* Place of residence
* Requests that you have made for your credit report, pre-approvals, employer inquiries
* Whether or not you are participating in credit counseling.
The author is the owner of the information-rich website www.poorcreditgenie.com. The website offers free advice on how to rebuild credit and manage debt. The site also features numerous articles and news stories on credit report, credit cards and bankruptcy.
About the Author
The author is the owner of the information-rich website http://www.poorcreditgenie.com. The website offers free advice on how to rebuild credit and manage debt. The site also features numerous articles and news stories on credit report, credit cards and bankruptcy.
Refinance Home Mortgage Rate News
Mortgage rates stay at record low - Cherry Hill Courier Post
Mortgage rates stay at record low Cherry Hill Courier Post WASHINGTON — The average rate on the 30-year fixed mortgage stayed at a record low this week, providing some added incentive for those looking to buy a home or refinance. Mortgage buyer Freddie Mac says the rate on the 30-year loan was unchanged at ... |
Senator Boxer Faults BofA for Mortgage-Refinancing Delays of Up to 90 Days - Bloomberg
 Washington Times | Senator Boxer Faults BofA for Mortgage-Refinancing Delays of Up to 90 Days Bloomberg “Delays could prevent borrowers from taking advantage of today's historically low interest rates and improvements recently made to the Home Affordable Refinance Program,” the California Democrat wrote in a letter today to Chief Executive Officer Brian ... Mortgage Q&A: Lenders impeding refi goals As Mortgage Refinancings Surge, Banks Struggle New HARP Could Help Up to 6.7 Million |
Landmark settlement with mortgage lenders provides relief for some struggling ... - MiamiHerald.com
 News Sizzle | Landmark settlement with mortgage lenders provides relief for some struggling ... MiamiHerald.com Finally, people who are current on their mortgage but owe more than what the home is worth could refinance at a lower interest rate. “This settlement will provide substantial relief to struggling Florida homeowners, and ensures that our state gets its ... Foreclosures to Climb Before Bank Deal Helps US Housing Market Home mortgage deal draws skeptics Foreclosure deal may trigger home seizures, heal housing market |
Fitch: Low Rates Providing Limited Help to Weakest US Mortgage Borrowers - MarketWatch (press release)
Fitch: Low Rates Providing Limited Help to Weakest US Mortgage Borrowers MarketWatch (press release) Low interest rates have indirectly helped all mortgage borrowers by providing support for home prices and the economy in general. However, Prime borrowers have benefited more than weaker borrowers. Since 2009, approximately 40% of all Prime RMBS ... |
Mortgage rates: How low can they go? - Christian Science Monitor
 Christian Science Monitor | Mortgage rates: How low can they go? Christian Science Monitor the average rate for a 30 year fixed rate mortgage dropped to 3.33 percent since last week, while the purchase application volume increased 0.1 percent and the refinance application jumped 9.4 percent over the same period. Refinances Surge on Record Low Mortgage Rates Mortgage applications jump on refi demand: MBA Mortgage applications jump as interest rates hit new lows |
Mass Refi Plan Would Hit Pensions While Easing Mortgage Payments - BusinessWeek
 Bloomberg | Mass Refi Plan Would Hit Pensions While Easing Mortgage Payments BusinessWeek Feb. 8 (Bloomberg) -- Like many homeowners, Vicky Kovari and her husband want to refinance their mortgage. A lower interest rate would save them hundreds of dollars a month -- and it would cost them, too. That's because like many Americans, ... The book on refinancing help: Update On Obama's Proposals Obama Says Mortgage Deal Turns Page On 'Recklessness' Mortgage Bonds Face Eye of Storm as Refinancings Decline: Credit Markets |
Loan Terms Made to Order - New York Times
 New York Times | Loan Terms Made to Order New York Times Lenders usually offer home loans in five-year increments, he said. JPMorgan Chase, for example, lists on its Web site fixed-rate mortgages in 10-, 15-, 20-, 25-, 30 and 40-year terms. The shorter terms are especially valuable to people refinancing ... |