Credit Scores – How Do You Rate?
Fun Fact: Credit scores have been available to New Hampshire home lenders since the 1950s. They did not become widely used until the 1980s, however.
What is a Credit Score?
A credit score is your credit report, summarized by a number that represents your creditworthiness (sometimes referred to as your FICO score). In simple terms, it is a measure of the likelihood that you will pay back the money you borrow.
How is my score determined?
Your credit score is determined by a mathematical formula or model that places numerical weights on different factors in your credit history including:
- Late payments – how many and how late
- How long a time period you’ve had established credit
- The amount of credit used (your current balance)
- The amount of credit available (your high credit)
- Residence history (how long you have lived there)
- Employment history (how long have you been at your job)
- Collection and charge-offs (outstanding bills you never paid)
- Bankruptcies
What is A Good Score?
There are many different models but for a New Hampshire mortgage, most credit scores we see range from a low of 500 to a high of 800.
- A score in the 500s is not favorable.
- A score in the 600s is the most common and usually acceptable.
- A score in the 700s is clearly a wonderful thing
FYI: All three repositories offer credit scores, but each of them call it something different:
- Equifax calls it the “Beacon” score.
- TransUnion calls it the “Empirica” score.
- Experian calls it the “FICO” score.
If you have questions about your credit or getting pre-approved for a New Hampshire home, call Charley Farley at (603) 471-9300 e-mail charley@charleyfarleyhomeloans.com.