ABOUT YOUR CREDIT SCORE
“What exactly happens when a mortgage lender pulls my credit?”
THE PLAYERS
Beacon at Equifax
FICO Risk Score at Transunion (Empirica)
Experian/Fair Isaac at Experian
MAIN REASON FOR FICO SCORES IS TO PREDICT YOUR CHANCES OF DEFAULT ON A SPECIFIC LOAN
Scores range from 300-850
Scores below 620 are considered high credit risk
Scores over 660 are below average risk
HOW ARE THE SCORED WEIGHTED
35% is established from your payment history, collections, and public records
30% is established from outstanding balances being carried on your accounts
15% is based on the length of your credit history. It is better to have credit for longer time frames so that a history is built upon
your record
10% is established around the type of credit you have
10% is established around your request for credit (credit inquiries), meaning that every time you apply for credit, your scores are impacted by certain FICO rules. You can, however, apply for as many mortgages and car loans as you want, as long as they are in a 14-day window. FICO allows this because they are big-ticket items
Auto and mortgage-related inquiries that occur within 30 days prior to scoring have no effect on the score
Outside of the 30 day period all auto and mortgage inquiries that occur within any 45 day period are treated as one inquiry
Federal Law allows one FREE credit report to consumers every 12 months from each credit reporting company.
Request your free credit report by visiting www.annualcreditreport.com
