SW Michigan Real Estate

Understanding Your Credit Score

Mortgage lenders use credit scores to help determine if you are likely to repay your loan on time. Your credit score is extremely important when being approved for a home mortgage. A good credit score will save you thousands of dollars over the years. Your credit score is a numeric expression of your credit file history & ability to pay back debts in the past. These scores are sometimes referred to as FICO Score or VantageScore.

FICO has a range of points from 300 to 850. A score over 670 is good and anything over 800 is exceptional.

VantageScore is a report that consists of 3 major credit bureaus TransUnion, Experian, and  Equifax. Their range of points are  from 300 to 850. A score of 700 is good and 750 and above considered excellent.

A credit report includes information from 2 or credit reporting agencies. Credit scores can range from between 400 and 800. 620 + is considered a “good” rating and 680 + is considered a “premium” rating. With a premium rating you may possibly get a lower interest rate. Your lender can help you with ways to improve your credit score if you need to. You need to always remember to  treat your credit like gold. I have listed the top three credit reporting agencies to help you figure out your credit score.

Equifax (800) 685-1111

Experian (800) 392-1122

TransUnion (800) 888-4213

Credit Scores Do Not Consider the Following Information:
Your race, color, religion, national origin, sex or marital status, your age, your salary, occupation, title, employer, date employed or employment history and where you live.

There are ways to rebuild your credit over around 7 years. Your credit score affects the home buying process. If you have a bad credit score you will need to start now to rebuild your credit. It takes time to rebuild your credit. It could take between 7 and 10 years. You will need to pay down the debts and re-establish a good payment history. 

Here is an idea of how long it may take to clear negatives off your credit report:

  • Late payments take around 7 years to be removed
  • Collection take around 7 years to be removed 
  • Chapter 7 bankruptcy takes around 10 years to be removed 
  • Chapter 13 bankruptcy takes around 7 years to be removed 
  • Civil court judgments take around 7 years to be removed 
  • Paid tax liens take around 7 years to be removed 
  • Unpaid tax liens take around 10 years to be removed

    Contact Valerie Bomberger, ABR with REMAX Harbor Country @ New Buffalo