Why you don’t need a perfect credit score

A perfect credit score is generally not required. In fact, lenders typically have their own set of underwriting terms that include other factors aside from credit score. Your ability to repay the loan, for instance, is often taken into consideration. So, even with a perfect FICO score of 850, you could still be declined for credit if you don’t meet the lender’s other criteria. Before applying for credit, it’s actually wise to contact your potential lender to inquire about their underwriting criteria. By doing so, you could save yourself a potential unnecessary hard credit inquiry if …

The effects of closing an account

When you close an account or tradeline, you retain the age of that tradeline for 10 years. But, you could still be negatively impacted by a closed account. For instance, closing a credit card will result in a higher utilization rate due to the credit limit from the closed account no longer being a part of your total credit card limit. Let’s consider the following scenario: You have a Visa and Mastercard, each with a $1,000 limit You only have a $250 balance, which is on the Visa card Your credit card utilization rate would …

The mortgage middle score

Your middle score is typically used by mortgage lenders when determining your mortgage eligibility. Your lender will obtain three credit scores from your credit reports, one from each of the three major credit bureaus (Experian, TransUnion, and Equifax). Of those three scores, the second-highest score is your middle score. Your credit report at each credit bureau contains many different credit scores and every lender doesn’t use the same score. You can contact your prospective lenders to determine which scores they use for …

Understanding what credit score you need

The credit score that you will need to obtain credit will depend on a number of factors, including the type of credit that you’re seeking, and most importantly, the individual lender’s criteria. Generally speaking, buying a car requires less scrutiny. Even with low or no established credit scores, a consumer would still be able to find a lender. However, it would likely come at a very high price in the terms of high interest rates. A home loan, on the other hand, involves more scrutiny and stricter lending guidelines because the value of home …

How to properly check your credit

When you check your credit, it’s important to not just obtain a credit report from one bureau. There are three major credit bureaus: Experian, TransUnion, and Equifax. Your reports at each bureau may not always have the same information, typically due to inaccurate data or the timing of the bureaus’ updates. Typical credit report discrepancies If you pull your report from all three bureaus on the same day and notice a discrepancy, such as one bureau not showing the most-up-to-date information, the most obvious reason for the discrepancy is that the bureau has just not updated …