Credit Scores Are Not Free – Here is an Alternative

Credit Scores Are Not Free – Here is an Alternative

Is Randy’s credit good enough to buy a house? He found that credit scores are not free – just credit reports. So how can Randy know? Seth’s alternative.

Since mortgage lenders use FICO scores, this is the one Randy needs to know according to Seth. Alternative to buying your score involves calculating your score. Result will show Randy a range of credit scores so he will know if he is in the game. Two basic rules:

1. Get your credit reports.

NOTE: AnnualCreditReport.com is the ONLY authorized source for the free annual credit report that's yours by law according to the Federal Trade Commission.

2. Calculate your score.

NOTE: Easy-to-use calculator available from FICO.

The FICO Score Calculator will ask 10 multiple-choice questions. Many of the answers can be found on the free credit reports you received in step 1. When your memory and your credit report come up with a different answer, use information in your credit reports. Why? Because FICO calculates your score based on information in your credit reports.

Seth’s summary of types of questions included in FICO Score Estimator:

· Current Accounts – How many credit cards, etc.

· Credit Availability – How much you owe compared to credit available.

· Recent Activity – Any new credit, applications or late payments?Currently late?

· Negative Events – Any bankruptcy, tax lien, repossession, account referred for collection, etc. in last 10 years?

Seth said that his FICO score should be around 620 – 640 to have a decent chance of qualifying for a mortgage. Randy estimated his score. Now he felt comfortable shopping for a house. Not so fast said Seth. There is one more step:

Validate. Randy needs to prove to real estate agents and sellers that he can get the money to buy. Nobody wants to waste their time with Joe Empty-Pockets. If he wants to be taken seriously, Randy needs a Pre-Approval letter from a mortgage lender.

Armed with a Pre-Approval letter, Randy found real estate agents eager to give him their time and a seller hesitant to let a live one go.

Kathy Godin, Award-Winning Loan Officer and Branch Manager

Prime Mortgage Lending, Inc.

(919) 789-9933

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