Many of you have specifically asked what types of things make a difference in determining your credit scores and how can you get them changed. Well, other than finding inaccurate information and filing a dispute with the individual repositories, i.e., TRW (which is now Experian), TU (Trans Union), and CBI (Equifax), there is not much you can do if the information is correct, but to pay on time, keep it clean, and WAIT.  However, if the information is indeed wrong, the repositories have 30 days to clean it up and have it correctly reflected in the credit scores as well, once you turn it in or report it.

From some of the information that I have received being a loan officer and educator I can take the most current of the items and share it with you now.

When determining how high a score will be,  these six characteristics can separate the cream of the crop from everyone else.  In descending order, they are:

Taking these six major characteristics, put together with other items they count, add TIME and you get the scores individually assigned to you. Each repository has it's own scoring system separate from the others. So you have a total of 3 scores.  Many lenders use the middle score to judge by, some use the average of the three and still others want to see the lowest score for their purposes.  For the purposes of mortgage loans, most of our lenders will use the middle score of the primary wage earner.

We understand that once the data is all gathered, the systems spit out a number that is roughly between 300 and 800. To define what is considered a "Good" score  you will need to have the vital score for the lenders purposes to be usually somewhere above 660.  At least that is where you can breathe safely knowing that most loans will be OK for you. However, if you are interested in the best rates on an equity line of credit or a second mortgage, most lenders require over 720 or higher to get their loans.

If the score falls between 620 and 660 it doesn't mean that it is bad either, it could just take more work to convince the lender that the risk is worth it. Below 620 and it's up for grabs!!! It will be very difficult to get a loan from most lenders on most of their loan products if the score is indeed under 620! 

IF you can document and substantiate unusual circumstances surrounding limited, concentrated, derogatory credit, such as medical problems beyond your control, then maybe you will have a chance to override the computer scores, with a human underwriter reviewing the documents provided and saying yes to the loan, because the proof of the explanation has been provided and accepted as truth and understandable circumstances. The credit before, and after, will have to prove to be good in order to make sense for the loan approval. Sadly, most of the bad credit I see doesn't have these reasons to work with. In that case, all you can do, as I mentioned in the beginning, is to clean up the bad and pay on time from here on out. Don't use too much credit and pay the balances down to zero as soon as possible.

I hope that this has been of help to the many of you who have asked what makes up the important credit scores and what you can do to change or improve yours. Credit scores  and their importance in mortgage lending are NOT going away any time soon! You can always call me if you have any further questions about this or anything else at 510-505-1180.
 
I'm so thankful that our Heavenly Father doesn't grade us on the same type of scoring system for present and past indiscretions in our lives;  but He forgives us and allows us a clean, pure slate, upon our just asking with a sincere request for forgiveness.  In this analogy I guess I could say:  "The past sin is healed, and the scars still show, but the loan is still granted by the Heavenly Underwriter who restores our losses and ultimately has paid all our Spiritual debt off for us."