Your FICO速 Score The Heartbeat of Your Financial Health
Contact me for more information! Noel D. Rivera
561.249.9703 Cell
Sales Manager
561.948.3336 Office
NMLS: 1001664
877.225.6676 Fax
7300 N. Federal Hwy Suite 202 Boca Raton, FL 33487
nrivera@afncorp.com www.noelrivera.afncorp.com
American Financial Network, Inc. is licensed by the Florida Mortgage Lender Servicer License (MLDB3356) under Nationwide Mortgage Licensing System (NMLS), unique identifier of 1295122. Refer to www.nmlsconsumeraccess.org and input NMLS #237341 to see where AFN is a licensed lender. In all states, the principal licensed office of American Financial Network, Inc. is 10 Pointe Drive, Suite 330, Brea, CA 92821; Phone: (909) 606-3905 (NMLS ID#237341). This is not an offer for extension of credit or commitment to lend. All loans must satisfy company underwriting guidelines. Not all applicants qualify. Information and pricing are subject to change at any time and without notice. The content in this advertisement is for informational purposes only.
Sometimes referred to as your FICO® score, your credit score offers lenders a quick and objective picture of your credit risk and ability to repay.
The FICO® Score which was introduced by Fair Isaac and Company in 1989 provided lenders with a purely financial evaluation of an individuals credit worthiness exclusive of race, ethnicity, religious affiliation, national origin gender or martial status. Your FICO® Score also doesn’t take into consideration age, current salary, occupation, or employment history, although lenders will take these, and other factors into consideration as part of your overall financial picture.
A FICO® score is the mathematical calculation of a number of different factors. Each of these factors or data points are given a certain percentage of the whole in determining the amount of risk a lender would be taking in offering you, a credit card, a car loan, a student loan or a mortgage.
Scores range from 300 -850. The higher the score the lower the risk. The better the score the more credit, and better terms, such as interest rate will be available to you. A review of your credit report and FICO® Score, as well as the lenders underwriting policies, could result in the lender extending credit to you even if your FICO® Score is low, or declining your application for credit even though your FICO® Score is high.
3 Credit Reporting Agencies
1
2
3
Equifax
Experian
TransUnion
There are actually three different agencies that make FICO® Scores available to you and prospective lenders. Each agency tracks your credit history using the same rigorous methods and compares the results to the general population to calculate your FICO® Score. While FICO® makes every effort to make these reports consistent, your score may vary from agency to agency. Lenders may choose to reference one or all three of these agency reports when processing your application. Two very good reasons to review each the three reports every year. The agencies are Equifax, Experian, and TransUnion. Each has a different name for their score. Equifax calls their Beacon, Experian has the Experian/FICO Risk Model, and TransUnion’s is the FICO® Risk Score Classic. When reviewing each of your three credit report look for mistakes such credit card accounts that might have been added to your report inadvertently. This can happen as the result of a clerical error, such as someone entering an incorrect social security number or incorrectly transferring information from a handwritten application.
Should have a dispute you can contact the credit reporting agencies directly: Equifax: (800) 685-1111, www.equifax.com Experian: (formerly TRW): (888) 397-3742, www.experian.com TransUnion: (800) 888-4213, www.transunion.com
Information Contained In Your Credit Report: The information contained in your credit report, and reflected in your FICO® Score, though constantly changing, is intended to give the lender a snapshot of your borrowing and repayment history at a particular moment in time.
Personal Information - Including name, address, social security, date of birth and employment.
Account Summary - The types of credit accounts you use including credit cards, car loans, mortgage, etc.), the length of time those accounts have been open, whether your bills were paid on time, how much credit you’ve used, as well as amounts owed and any “new credit” you have applied for recently. Minimizing the number of credit accounts and making timely payments will give you the best score.
Inquiries - There are two types of inquires, voluntary and involuntary. 1. Voluntary Inquiries are those authorized by you at the time you’ve applied for a loan, and any inquires you’ve made as part of maintaining a good credit score. There are no penalties penalized for checking your credit through the three major agencies or any other organizations authorized to provide credit reports such as www.freecreditreport.com, or www.myFICO.com. 2. Involuntary Inquiries - Credit checks by an employer as well as pre-approval credit inquires do not effect your score. However large numbers of inquires can suggest you’re a greater risk.
Important Note - Regarding Inquires: When shopping for a loan, you’re less likely to affect your score if your inquires are within a 14 day window. The activity in a shorter period signals that you’re shopping for the best loan terms from multiple lenders.
Negative Items - These include delinquencies, unpaid or overdue payments sent to a collection agency, bankruptcies, tax liens, foreclosures, garnishments, legal suits, judgments and public records from state and county courts. Maintaining reasonable debt is fine so long as you pay on time.
Calculating Your FICO® Score: Each of the factors is assigned a weight or percentage to arrive at your total credit score. These percentages are based on the importance of the five categories as they apply to the general population. In particular cases, for example, individuals who haven’t been using credit for very long, or have experienced a foreclosure or some other issue that would effect their credit negatively, the relative importance of each of these categories will vary. It’s important to note that while a foreclosure may lower your credit score very quickly, repairing and improving that score takes time.
01
PAYMENT HISTORY - accounts for 35% of your FICO® Score which includes:
02
AMOUNTS OWED - account for 30% of your total score and includes:
03
LENGTH OF CREDIT HISTORY - accounts for 15% of your score and includes:
04
AMOUNTS OWED - accounts for 10-% and includes:
05
NEW CREDIT - also account for 10% of your total and includes:
A review of all credit card accounts, retail accounts, installment loans, finance company accounts and mortgage loans, as well as delinquent payments, bankruptcies, foreclosures, law suits, garnishments, items in collections, liens, judgements, or other matter of public record.
All types of credits accounts, how many accounts with balances, how much of each individual credit line is being used on revolving lines of credit, and amounts outstanding on any installment loans.
How long accounts have been established, focus on specific types of accounts depending on the type of loan you may be looking for, and how long it has been since you used each account.
The kind of credit accounts you have, and how many of each type - looking for a good mix.
Are you taking on more debt, how many new accounts you have by type, how long since you opened a new account, how many recent requests for credit inquiries you’ve made remain on the report for two years but the score looks at the past 12 months, length of time since credit report inquires were made by lenders - whether you have a good recent history following past payment problems. So what is a good credit score? Since every lender will view scores differently based on their own risk tolerance, it’s hard to say exactly what a good credit score is. Some lenders may see a FICO® Score of 680 or above as a cut-off, while others require a 720 or higher before they would consider extending credit to a borrower.
Maintaining and Improving Your FICO® Score There are a number of things you can do to maintain and improve your FICO® Score:
Check your credit report once annually. Make a point of reviewing your credit report six months prior to applying for a loan. This gives you time to make corrections and even improve your score.
Pay all bills on time. Get all accounts current and stay current. Lenders are always looking for a pattern of regular payments. Even if you missed one or two, getting back and staying on track should help your score over time.
Keep balances low on credit cards and other sources of revolving credit. It’s not bad to maintain a reasonable balance on a credit card. While, if you have reached your credit limit on an account and are only paying the minimum each month, you can negatively effect your FICO® Score.
Pay off debts, don’t move to other cards. Transferring balances doesn’t reflect well on your ability to pay.
Maintaining and Improving Your FICO® Score
Don’t remove credit history. By closing unused accounts, you effectively delete important credit history. Don’t close unused accounts. Closing accounts won’t get you a better score.
Don’t open new credit card accounts. New accounts lower your average account age.
Contact creditors or consultant a Credit Counselor. Work with creditors to bring down balances by making on time payments. Consider consulting a Credit Counselor if necessary.
Don’t open a lot of new accounts quickly. Particularly if you have only recently established credit.
Avoid credit repair agencies. You don’t have to pay to improve your score.
Research from independent sources has shown that credit scoring is not unfair to minorities and even those individuals who have what is sometimes referred as a “thin” credit history.
Credit is a critical component of your over financial health. Maintaining a good FICO® Score can mean getting a loan faster loan and with better terms. The objective nature of the FICO® Score process allows for a fair assessment of your ability to repay a loan without fear of discrimination of any kind. In the event that you are denied credit, the Equal Credit Opportunity ACT ECOA gives you the right to find out why within 30 days. You are also entitled to a free copy of your credit report within 60 days. The credit report can be obtained by contacting the three credit agencies. If your FICO was the primary reason for the denial, the lender will indicate the reasons for the score to explain why you failed to qualify. For more info go to www.myfico.com/crediteducation.
AFN NMLS: 237341
Contact me today for more information! Noel D. Rivera
561.249.9703 Cell
Sales Manager
561.948.3336 Office
NMLS: 1001664
877.225.6676 Fax
7300 N. Federal Hwy Suite 202 Boca Raton, FL 33487
nrivera@afncorp.com www.noelrivera.afncorp.com
American Financial Network, Inc. is licensed by the Florida Mortgage Lender Servicer License (MLDB3356) under Nationwide Mortgage Licensing System (NMLS), unique identifier of 1295122. Refer to www.nmlsconsumeraccess.org and input NMLS #237341 to see where AFN is a licensed lender. In all states, the principal licensed office of American Financial Network, Inc. is 10 Pointe Drive, Suite 330, Brea, CA 92821; Phone: (909) 606-3905 (NMLS ID#237341). This is not an offer for extension of credit or commitment to lend. All loans must satisfy company underwriting guidelines. Not all applicants qualify. Information and pricing are subject to change at any time and without notice. The content in this advertisement is for informational purposes only.