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Your Credit

One of the major factors considered when determining qualification for a loan is your credit score. Credit scores range from a low of 375 to a high of 900 points. The higher your score, the better. Your credit score measures:

  • Your payment history
  • Your outstanding debt
  • Your credit history
  • Your pursuit of new credit
  • The types of credit you use

The major credit-reporting agencies are: Experian, Trans Union, and Equifax. They all use credit scores and may have slightly different information about you. Consequently, each may have different scores for your credit.


What's an acceptable score to become a homeowner?

Lenders want to be sure a person has a strong likelihood of making their payments consistently and on-time. No lender ever wants to foreclose on a home.

Statistics show that:

A. Borrowers with credit scores above 800 have only a 1 in 1.292 chance of defaulting on their loan.
B. Borrowers with credit scores between 700 and 719 have a 1 in 123 chance of defaulting on their loan.
C. Borrowers with credit scores below 600 have a 1 in 8 chance of defaulting on their loan.

Income, job history, available assets, and the property are also considered in underwriting a loan. Borrowers with credit scores below 600 usually have to be stronger in these other areas to get approved. Underwriting is a blend of credit score review along with the other factors.

Don't despair if your credit score is low

  1. Your credit score can be improved over time simply by making
    payments by the due date.
  2. Consumer disputes about information on your credit report can be resolved by calling:
    Equifax: (800) 685-1111
    Experian: (800) 831-5614
    Trans Union: (800) 634-8440
  3. At Cherry Creek we have a wide variety of loan programs available, some of which are very liberal about accepting low credit scores.
  4. We can also refer you to someone to assist you in working on your credit issues and raising your credit scores.

So, one of the things we discuss at the free "Pre-Approval Consultation" is your credit score and how it affects your ability to become a homeowner. Click here for our complete credit repair document.

 

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