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Knowing your fico score could save you thousands, recent changes are critical to observe.

 

There have been some recent changes to credit scoring (fico) this could be critical in applying for a new loan..

The recent changes by FICO or Fair Issac Corporation will most likely effect 90% of all borrowers who are applying for a mortgage. The changes may not directly impact your credit score, but almost every lender today utilizes some type of credit scoring model to determine your loan eligibility. The market for a competitive mortgage rate will become increasingly more difficult for borrowers with less that perfect credit scores. Fannie Mae has made a number of changes for borrowers over the past 12 months largely due to the fall out from the housing market and sub prime loan industry. The benchmark in today's market is a fico score of 740 or higher, which is about fifty points higher than the average credit score. If you have a credit score below 740 then you should expect to pay a premium when you are applying for a mortgage loan. The premium you pay will often be in the form of discount points and correlated directly between your down payment/equity position and your fico score. The secondary market is clearly placing a larger premium on individuals that it perceives may be a credit risk and have utilized credit scoring as one of the major components. The FICO scoring system by Fair Isaac has recently been revamped. If you are planning to purchase a home or refinance your mortgage in the near future, understanding your present fico score and the possibility to improve this could save you hundreds or potentially thousands of dollars. Most mortgage lenders today will only be able to tell you your general fico score, if you need to raise your credit score you may wish to find out if they work with a rapid rescore company that has the ability to help correct your credit blemishes and raise your credit score in a short period of time.

 

5-4-2008 ? LoanNetwork.com

 

 

 

 

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