Credit Scores And What They Mean
September 23rd, 2009 categories: Buyer Resource
Credit Scores are a huge part of the Real Estate buying process, even if they do not seem so. Credit scores largely determine the cost of credit and thus monthly payment for buyers.
Credit Scores, at their most basic level, are a statistical representation of a borrowers likelihood of repayment of obligations. Credit scores range anywhere from 300 up to 850…higher being better.
In general, the higher your credit score, the lower the cost of credit you can qualify for…so if you have a good credit score, you pay less for credit. The lower your credit score, the more you pay for credit…and you will possibly be turned down for credit if your scores are too low.
Credit scores, AKA FICO scores (named after Fair Isaac Company), are reported by 3 different credit reporting bureaus, and each calculates scores a little differently. The three companies are TransUnion, Equifax, and Experian.
Even though the three credit reporting companies use a different formula, they each break borrowers down into 6 groups by credit score. These groups are as follows:
- 850 – 720
- 719 – 700
- 699 – 675
- 674 – 620
- 619 – 560
- 559 – 500
Any Credit Score below 500 will almost always be declined credit, or forced to pay much higher rates…much much higher rates.
Visit Sonoma County Mortgage Rates to learn more about prevailing Sonoma County interest rates.
