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What is the range for Credit Score?

Generally the range is between 350 to 850


What is a good Credit Score?

700 points or higher would be considered very good in mortgage lending


What is the FICO Score and how is it calculated?

A FICO score is a credit score developed by Fair Isaac Company.  Credit scoring is a method of determining the likelihood that credit users will pay their bills.


Credit scores analyze a borrower's credit history considering numerous factors such as:

               Late payments

                The amount of time credit has been established

                The amount of credit used versus the amount of credit available

                Length of time at present residence

                Negative credit information such as bankruptcies, charge-offs, 

                collections, etc.


There are usually three FICO scores computed by data provided by each of the three bureaus:  Experian, Trans Union and Equifax.


Should a person pay off their debt?Should a person pay off their debt?

The only debt that should be paid during the loan process is unsecured debt (credit cards).  Paying collections will decrease the credit score due to the date of last activity becoming recent.  But if you do decide to pay off a collection, MAKE SURE that the creditor gives you a letter of deletion first.


How many credit cards should a person have?

3 to 5 cards is best


What kind of balance should I leave on my credit card to maximize my Credit Score?

As close to zero as possible, but if you can't pay them to zero, try to keep your balances under 30% of the limit at all times.


Should I close any of my credit cards?

NOT during a loan process.  In general, if you close credit cards your score will most likely go down.  It will appear to the FICO that your debt ratio has gone up.  Also, closing a card will effect other factors in the score such as a length of credit history.  But if you have to close a credit card account, close newer cards with lower limits first.


How much do inquiries hurt the score?

An inquiry can affect a score anywhere from 2 to 25 points depending on other elements in their report.  If  a borrower needs 5 to 10 points, a hard inquiry could make the difference in immediate loan approval.


Does the score go down if a person runs their own personal credit report?

NO,  You can pull your report as many times as you want personally, and it will not affect your score.


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