| During the last few decades, we moved many | | | | companies (Experian, Equifax, and TransUnion) and |
| times from place to place, buying and selling | | | | getting a separate credit report from each one. |
| houses and other property. To my knowledge, | | | | Don't be surprised if you find small differences |
| not even the most respectable bank that carried | | | | among these reports because each company |
| our mortgage ever had anything to do with any | | | | does its own calculating in its own way. Getting all |
| FICO score. I first heard "FICO score" mentioned, | | | | three reports is especially necessary if you find |
| about six or seven years ago, when one of my | | | | something inconsistent in your credit history and |
| children worked for a mortgage company, and I | | | | you need to correct it with all three of them. |
| found out from him that FICO score has been | | | | If you feel your credit history is good, the best |
| around since the 1950s, after Fair, Isaac and Co. | | | | way to get your free credit report is getting a |
| (therefore the acronym FICO) developed a | | | | form from Annual Credit Report Request Service |
| certain method to determine the credit risks of | | | | ( and filling and sending it to P.O. Box 105281, |
| borrowers. | | | | Atlanta, GA 30348-5281; or if you wish, you can |
| FICO scores range from 300 to 850, the higher | | | | get it online from |
| the better. The majority of scores are in the | | | | Do not, at any time, believe in the companies or |
| levels of 600-700. The desirable ones are 720 and | | | | online sites that promise to get you your free |
| higher. FICO scores are designed to measure the | | | | credit report. Most of them eventually ask for |
| risk of delinquency by considering several past | | | | fees and start charging your credit cards, because |
| and present issues, such as the length of credit | | | | you have accepted their services and they have |
| history, punctuality of payment, current debt | | | | your data in their hands. |
| including tax liens and money owed as a result of | | | | Does every lender pay attention to the FICO |
| a court judgment, recent searches by the | | | | score? Luckily, not all; although most may. In the |
| consumer to obtain credit, and the amount of | | | | beginning, FICO scores had little or nothing to do |
| credit received up to date. The exact formula for | | | | with mortgage lending. About five or six years |
| obtaining the FICO scores, however, is held secret | | | | ago, however, mortgage lenders realized that |
| and--it beats me, but--this conduct is accepted by | | | | there was a certain connection between the |
| the Federal Trade Commission. | | | | negligent behaviors of borrowers and their credit |
| Three nationwide companies, Experian, Equifax, | | | | scores. |
| and TransUnion, use the FICO scores for credit | | | | After a couple of years of heavily relying on the |
| reporting. All three of these companies are | | | | FICO scores, mortgage companies are beginning |
| required by law to provide the consumer-you-with | | | | to change their attitudes on the subject again. |
| a free credit report every twelve months. | | | | Lenders like Fannie Mae and some private |
| You might ask: "If we have the FICO scores, | | | | mortgage companies do their own investigations |
| then why do we have a credit report? Aren't | | | | as well as taking into account your credit report |
| FICO scores enough?" A credit report is more | | | | as a whole. |
| than a FICO score. A credit report gives extra | | | | A few tips before applying for a mortgage: |
| information on you, as to where you live and | | | | * Do not leave or change your job, especially if |
| have lived, whether you had a run-in with the law, | | | | you have worked there for some time and you |
| and if you were sued or filed for bankruptcy. The | | | | are not replacing it with a more secure and better |
| FICO score, as a general rule, is attached to the | | | | paying job. |
| end of a credit report. | | | | * Make sure your credit cards are not charged to |
| Your credit report is important. The information in | | | | the max. |
| it has to be up to date and correct, because it will | | | | * Do not ever be late in paying your existing |
| be used not only for the purchases you make, | | | | mortgage. At least, don't be late for more than a |
| but also when you are applying for a job. You | | | | month. |
| need to get your credit score and take measures | | | | * Discuss and bargain with small lenders (Dept. |
| if the information in it is not correct or has | | | | Stores etc.), businesses, and collection agencies to |
| become stale. Consumer reporting companies are | | | | remove any late payments. |
| required by law to correct anything wrong or | | | | * If you have a federal student loan, seek to |
| inconsistent after they investigate your claims. | | | | remove "default" or "collection" labels from the |
| To obtain your free credit report, you might | | | | loan's history. |
| consider writing to each one of the three | | | | * Get into the habit of paying your bills on time. |