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FICO scoring being revised

There has been some recent advertizing asking if you know what your credit scote is.  But, the question shouldn't jsut be do you know what your credit score is, but do you know what A credit score is?

A credit score is a number that shows to potential creditors if you are a good risk with regards to extending credit.  The Fair Isaac Company (FICO)provides these scores to 90% of the creditors you might deal with.  That includes credit cards, auto loans and mortgages.  The score is comprised of many factors, and those factors are weighed in differing amounts.  

 FICO has announced that they are revising how medical bills are weighed along with changes to how settlement with collection agencies is viewed.  They will be giving less weight to these items, which will in many cases increase the FICO score and therefore possibly make getting credit easier and or less expensive.  Creditors, in addition to basing their decision to extend credit, also based what they will charge (the interest rate) on the FICO score.  

The overall expectation is that these revisions will make obtaining credit easier and could save consumers money.  It is possible that creditors will revise their own policies to look at raise the minimum acceptable limits, but the overall concensus at this time is that this new policy will be good for consumers and the economy.

So, if you have been on the borderline for qualifying for a home mortgage, it may be easier for you to do so.  If you need help in locating a lender and searching for your new home, please contact me at 480-236-7374.

For more detailed info on this, check out this article from US News. http://www.usnews.com/news/articles/2014/08/08/fico-changes-could-ease-access-to-credit

Adam Tarr PC
Citywide Real Estate
Phoenix, AZ

 

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