Posts Tagged ‘FICO’

If Banks Can’t Do Subprime, They Won’t Lend At All

A full third of Americans cannot qualify for a mortgage these days, recent data from Zillow.com and MyFico reveals. Would-be homeowners with credit scores at 620 or below are not being approved for traditional 30 year mortgage, even when they come with a healthy down payment of 25% or more.

In the days of glory before the housing bubble burst, these folks would have been steered into dangerous subprime loans that we know today were doomed to fail. Despite the fact that in most cases, this same group of people would have done fine with a conventional loan,  the banks wanted to increase their profits to extreme proportions.

Today, with foreclosures at record numbers and some banks being left holding the bag, most banks do not want to risk lending to people with low credit scores, all other things being equal. This is particularly troubling since many Americans have seen their credit scores take a hit from the bad economy. The housing market is weak enough, and banks not lending is a major factor in the continuing sluggish growth of the economy.

Free Credit Reports: What You Need To Know

The CARD Act, the new law regulating credit card companies also sets forth  a new regulation  regarding companies that use free credit reports to entice people to enroll in paid services such as ordering credit scores, credit score monitoring, and identity theft protection services.

Basically, the new rule is this: anyone who provides free credit reports must let people know that they can obtain their government mandated annual credit report (three reports in total, one from each Credit Bureau) from AnnualCreditReport.com. This website has been established as the centralized location to allow people to obtain their credit reports for free.

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Understanding Your Credit Report Score

credit-score-1 Understanding your credit report score can sometimes be like trying to decipher ancient Egyptian hieroglyphics. Until recently, the score itself and the methods for calculating it were a complete secret.

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