Columnist Elyse Wood
[Credit Repair]
It’s a New Year and I am sure there are many of you who have put your financial goals in focus and wish to make a change. Many of you may want to get your credit in order, pay debt down, or become homeowners, or at least “own” some type of property.
Here are some things you should know for the new year:
1. Using credit karma website to monitor your scores cannot help you. Those scores are VANTAGE scores. You need FICO scores. Credit Karma may be free but they are a marketing site. They market their affiliates to you and they get paid when you sign up for certain cards they recommend.
2. FICO scores are used in 90% of lending decisions.
3. There are a bunch of FICO scores. FICO 8 is usually used for credit cards and personal loans. To buy a house you need: Equifax Beacon 5; Experian 2; Transunion 4.
Download the Experian Credit Works app or The MyFICO app to get your mortgage scores if you’re serious about buying this year.
4. They take all these scores and the MEDIAN SCORE (the middle score) is used to qualify and offer you a rate. For example your scores are:
Equifax Beacon 5 = 630
Experian 2 = 711
Transunion 4 = 657
The 657 is what underwriters will use to determine eligibility and offer a rate to you.
5. You need AT LEAST a 580 for FHA loan or a 620 for a conventional loan.
6. BUYING A HOUSE IS NOT ALL ABOUT YOUR SCORE.
DTI MATTERS
DTI is Debt to Income — how much your monthly expenses are versus how much you make a month. Can you reasonably afford a house??? Now you may be wishing you didn’t get that Benz that’s killing your budget.
7. Student loans kill the dream. If they’re in default you’ll be in a system called CAIVRS where all government debts that are delinquent are kept. You CANNOT get a government backed loan (VA/FHA/HUD) if you already owe the government.
8. Also if you have a large number of student loans (I’ve seen credit reports with $100k PLUS in student loans). If you’re not on IBR plan but should be GET ON IT. Most lending guidelines require what’s reporting as your monthly payment be used which will help a great deal.
These are just some of the very basic things you need to know if your serious about homeownership.
If you are serious about repairing or fixing your credit, Credit Corrector Solutions can get you started on the road to Better Credit!
Call Us Today at 1-877-335-8865 or fill out our secure consultation form by going to https://creditcorrectorsolutions.typeform.com/to/LEofvo
