Credit Scores
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Credit Scores

It is necessary to pull a tri-merged credit report from Experian, Transunion, and Equifax when applying for a mortgage loan. Lenders will use your middle credit score for qualifying and pricing purposes. Some  lenders want to see a minimum of a 620 in order to get an A-paper loan. This is not the case at all lenders, and the thing to do is to have your loan run through automated underwriting via FNMA (Federal National Mortgage Assocation), also known as Fannie Mae or FHLMC Freddie Mac. This entails having a broker upload your file through the desktop underwriter (FNMA) or the Loan Prospector (FHLMC). If the loan meets investor guidelines, it can be sold to them after funding and the lender is ok making the loan.

Factors that influence your credit scores at the 3 credit repositories include many things. A few of them include the proportation of your outstanding balance to your available credit. Your payment history (i.e. # of 30, 60, 90 dys late on the accout). Other derogatory factors include bankruptcies and foreclosures and how long ago they were. Generally, as something bad gets farther and farther away, it has less of an effect on your credit scores. Normally after something like this, it's always a good idea to establish some new tradelines like secured credit cards, (Capital One, etc.) to reestablish a track record of on time payments.

Things that can help to improve your credit scores include paying off accounts, and not having your credit pulled too many times. I've seen folks do this repeatedly over a short perioed of time and it can really blow it for them in terms of qualifying for a good loan. Try to never let collection accounts for small silly bills get on your credit. These may include parking tickets, utility bills, phone bills, to name a few. Also check the public records section of your credit report for items which went to collections and are now charged off. Sometimes creditors obtain judgements and this is the area they can be found. This happened once to a client of mine who had received a parking ticket from a City. Things can wind up here.

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