Understanding Credit Scores and Reports
by Carla L. Davis
Having a healthy credit score is now more important than ever. When the mortgage crisis hit several years ago, lenders began tightening standards for loans. Even now, years after the onset of the crisis, changes in Congressional and housing agency legislation have made it more crucial to have your credit in order before buying. The days of zero down are out, and the days of healthy scores and equally healthy down payments are in fashion.
The first step towards homeownership is to get a copy of not only your credit score, but also your entire credit report. A credit score is a number from around 350 to 850, with higher scores being considered better. Any score less than 600 will put you in a hard place to qualify for a loan. What can make your score low? If you have defaulted on loans, made late payments, or filed for bankruptcy, these issues will have been reported to the credit agencies and will subsequently lower your score. A lower score means you are more of a liability to a lender.....