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New Credit Scoring For Lenders


A major credit scoring system is being revamped to help lenders improve their underwriting


The major company that lenders use to determine borrowers qualifying for underwriting, Fair Isaac Corporation, known as (FICO) scoring is changing the way they determine your fico score. Credit scoring typically ranges from 300-850 and is based on a proprietary modeling system. Details on the new scoring method indicate a heavier emphasis will be placed on a borrowers history if they have a track record of delinquencies. However, if a borrower offsets their delinquencies with a strong payment history on other accounts they may not see such a large drop in their credit scores. For lenders, a borrowers credit history is amongst the most important items used to determine whether a borrower qualifies. Knowing your fico score is very important as this will have a significant impact on your interest rate, especially with Fannie Mae and Freddie Mac recently announce risk based pricing changes based on a borrowers fico score and loan to value.

12-21-2007 ? LoanNetwork.com





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