A brand new FICO credit scoring model will be used in the summer of 2020. These credit changes will affect millions of home buyers. <\/p>\n\n\n\n
Every 5 years or so FICO rebuilds their score model. This new scoring model will look at your credit history for the last 24 months, whereas the current model only looks at the last 1-2 months. <\/p>\n\n\n\n
It will also look at things such as personal loans for those\nthat have consolidated old credit card debt into a personal loan and\nsubsequently opened a new card. <\/p>\n\n\n\n
Anybody that has taken out a personal loan to consolidate\ndebt or who has carried high balances on credit cards, made late payments etc.\nwill be negatively impacted by the new scoring model by as much as 20 points.<\/p>\n\n\n\n
A FICO score is a number that lenders use to determine how likely you are to repay a loan based on your credit history. This number affects how much money you can borrow, how many months you will have to pay on it and how much it will cost you based on your qualifying interest rate<\/strong>. <\/p>\n\n\n\n A FICO score is important because it can help you gain\naccess to credit for things you might need such as paying medical expenses,\ngetting an education, or buying a home. <\/p>\n\n\n\n Having a good credit score can save you thousands of dollars\nin interest and fees because lenders are more likely to offer better rates if\nyou present a lower risk to them. <\/p>\n\n\n\n Mortgage loans are based on credit risk. Generally speaking,\na higher score results in a lower rate. The difference in interest rate could\nsave you thousands of dollars over the life of your home loan.<\/p>\n\n\n\n Higher Credit = Lower Rates<\/strong><\/em><\/p><\/blockquote>\n\n\n\n Conventional home loans<\/a> are the most credit dependent. A lower credit score will result in higher interest rates and higher private mortgage insurance (PMI).<\/p>\n\n\n\n Many government insured home loans such as FHA Loans<\/a>, VA Loans<\/a> and USDA Rural Development loans<\/a> are not as credit sensitive. You may still qualify for a great low rate without the highest credit scores.<\/p>\n\n\n\n The new scoring model will affect around 110 million\nconsumers later this summer when it is put into effect. <\/p>\n\n\n\n For anyone with scores around 600 or below, it could\nfluctuate your score negatively around 20 points. Alternatively, for those with\nscore of 680 or above, your score could go up around 20 points. <\/p>\n\n\n\n The additional data the new scoring model will use will help\nto provide better accuracy for credit scores.<\/p>\n\n\n\n Although the new scoring model will affect millions of consumers- the 3 general principles to maintain good credit remain the same: <\/p>\n\n\n\n If you are confident of your credit score, then now may be a\ngreat time to take advantage of your hard work by qualifying for a low mortgage\nrate. <\/p>\n\n\n\n Mortgage rates are near historic lows. A high credit score could\nsave you thousands by refinancing to a low rate or it could help first time\nhomebuyers qualify to borrower more for the same cost.<\/p>\n\n\n\n To get a rate quote, give us a call at 800-555-2098 or\nrequest information below.<\/p>\n\n\n\n <\/p> Why does a credit score matter when buying a home?<\/h2>\n\n\n\n
Who will be affected by the new FICO 10 score model?<\/h2>\n\n\n\n
How to improve your credit score<\/h2>\n\n\n\n
Take Advantage of High Credit Scores<\/h2>\n\n\n\n
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