Showing posts with label Credit Report Tips and Myths. Show all posts
Showing posts with label Credit Report Tips and Myths. Show all posts

Why you don't need an 800 credit score for a Kentucky Mortgage Loan Approval

Your credit score — that sometimes mysterious number that reflects how responsible you are with your credit — plays a gigantic role in your overall financial life.
Pretty much any time you apply for credit, someone (or in some cases, a computer) will be looking at that number to determine if they are willing to extend that credit to you and, if so, at what rate. That applies whether you’re applying for a new credit card, a car loan or a mortgage.
Hopefully you know what your credit score is (if not, we’ll help you find out), but do you know if your credit score is good?
In this article, we’ll cover what money expert Clark Howard and others consider a good credit score, where your can track yourscore, and how to improve it if it needs work!

What is a good credit score?

First, it’s important to know that your FICO credit score (by far the score used by most lenders) is a three-digit number that can range from 300 to 850, with 850 being the absolute highest score you can achieve.
So, how do things break out along that range when it comes to “good” and “poor” scores? Here’s how credit reporting agency Experian sees it:

Credit score chart

As you can see, according to this chart, the majority of Americans have “Good,” “Very Good,” or “Exceptional” scores.

In fact, according to, as of 2016 (the latest numbers available), the average FICO score nationally was 699. That was an all-time high!

But different creditors have different ideas about what makes a “good” credit score, and for that reason your ability to get credit and the rate you’re offered can vary from lender to lender. This is why some people aim for a score of 850 — something Clark says “you’re crazy if you obsess with.”

You don’t need to aim nearly that high.

“If you can get up to around a 760, you’re going to get the same benefits, the same offers, that someone who has an 840 score is going to get,” says Beverly Harzog, Credit Card Expert and Consumer Finance Analyst for U.S. News & World Report.

That said, if your credit score is currently in, say, the low 600s, 760 might seem a long way away. That’s still no reason to be discouraged!
There are other numbers that can make a huge difference in the offers you receive and the rates you can get on loans, Clark says:
“There are certain breakpoints where things get easier for you. One that’s really important is being around a 680. That’s a point at which people look at you differently than when you’re below that.”

You can also get free credit reports (which are more comprehensive than what you get with Credit Karma or Credit Sesame) from all three major credit reporting bureaus once a year at

How can you improve your credit score?

To improve your credit score, you should address each one of the factors that goes into calculating your score individually. According to, those factors are:

Credit score factors

Payment History

As you can see from the graphic, the single most important factor is your payment history. That means that not paying your bills on time can do serious damage to your credit score. Even if you’ve had some late payments in the past, you can improve your score going forward by paying each and every bill on time.

Amounts Owed

The second most important factor is the amount you owe on your credit lines. This is calculated as a percentage: the amount you owe divided by the total amount of credit you have available. It’s best to keep this under 30% — even better if you can keep it under 10%.
So, if your total credit line (between all of your credit cards and other loans) is $10,000, it’s good to owe less than $3,000 and great if you owe less than $1,000.
Length of Credit History
The next most important factor is your length of credit history. This is determined by the date you opened your earliest credit account that remains open today. Since you can’t go back in time and open an account any earlier, the most important thing you can do in this area is make sure you don’t close any of your oldest accounts.

New Credit and Credit Mix
Finally, accounting for 10% each of your credit score are New Credit and Credit Mix.
New Credit means accounts that you either open or apply for that result in what’s called an “inquiry” to your account. Almost any time you apply for credit (whether you are approved or not) your score will drop a bit. It usually doesn’t take long to recover, but the important thing to remember here is to only apply for credit you really need. If you apply for every card offer you receive, your score will suffer.
Credit mix refers to the different types of credit you have. Again, this one is not a huge deal, but someone with credit cards, a mortgage, and a car loan will general be judged more favorably than someone who just holds credit cards

Full article link below

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346

Text/call 502-905-3708
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916
-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

How do Judgements affect a Kentucky Mortgage Loan Approval?

Judgments and how they affect a Kentucky Mortgage Loan Approval.

Judgements are treated differently than collections when it comes to a mortgage loan approval in Kentucky. 

  • All judgments must be paid off prior to the loan closing unless there is a written agreement for a payment plan.
  • In order to accept a payment plan for a judgment, the written agreement must be provided along with evidence that at least 3 payments have been made and that all payments have been made on time.
  • Any payment plan for a judgment must have its monthly payment include in the DTI calculation.
  • Judgments of a Non-Purchasing Spouse in a community property state must be included, unless excluded by state of Kentucky 

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Joel Lobb
Senior  Loan Officer

 phone: (502) 905-3708
 Fax:     (502) 327-9119

 Company ID #1364 | MB73346

Minimum Credit Score Needed to Buy a House in Kentucky

Minimum Credit Score Needed to Buy a House

Your credit score is just one of the factors your mortgage lender will use to determine whether you qualify for financing. The problem is, every lender uses different methods to determine your credit worthiness. So, in some cases, a minimum score is difficult to determine for conventional loans. In other cases, especially when loans are underwritten or insured by government organizations, there are minimum credit scores to qualify.

Acceptable Scores

The score your lender will accept for a conventional loan can be determined by many factors, including your payment history, your salary history, your current wage, your available credit, the scores other lenders are accepting and the current economic climate. Cornett Communications advises that even in tight economic times, a score of at least 640 will get you in the door for financing.

Fannie Mae

Fannie Mae is one of two government-backed mortgage lending houses; Freddie Mac is he other. Independent lenders take many of their cues from what these two organizations do. According to the "Washington Post," Fannie Mae raised its minimum credit score for conventional loans in 2009 from 580 to 620. Even if you have a 20-percent down payment, you can be rejected if your score is below 620. Fannie Mae will also reject a loan if more than 45 percent of your income goes toward paying debt.

Government-Backed Loans

Home loans backed or financed by the Federal Housing Administration and the Veterans Administration have different views of credit scores. FHA recently changed its minimum credit score to 580, which qualifies you for lending programs that require only a 3.5 percent down payment. VA loans are 100-percent financed and set aside for active and retired military, along with their families. There is no minimum credit score to qualify, though a better credit score will get you a better interest rate.

What Your Score Gets You

Your credit score is one of the factors that will determine your mortgage loan interest rate. The better your score, the better your interest rate is likely to be. FICO, also known as the Fair Isaac Corporation, posted the differences in interest rate you may pay, depending on your score. If your score is between 620 and 639—considered a risky score by some creditors—you could pay an interest rate of 5.718 percent on a $300,000, 30-year conventional mortgage. As of mid-August, 2010, If your score is at the high end, 760 to 850, your interest rate could be 4.129 percent on the same loan. A score of 650 may net you a rate of 5.172 percent.

Addressing Your Credit Score

If your credit score won’t allow you to get a home loan now, you can so some things you can to improve your score, which are updated on a monthly basis. Make sure all of your bills are paid on time; late payments drive down your score. Pay down your credit balances; maxed-out credit accounts can also hurt your score. Also, check your credit report on a regular basis for errors. This is one of the easiest ways to improve your score. If you find errors on your report and you can prove they are errors, the credit bureau is obligated to remove them.

About the Author

M.C. Postins has been a writer and editor since 1995. His work has appeared in newspapers, magazines and websites across the country, such as the "Charlotte Sun-Herald" and the "Denton Record-Chronicle." He received a Bachelor of Arts degree in journalism from Stephen F. Austin State University.

Rapid Rescore for A Louisville Kentucky Mortgage Loan Approval

Rapid Rescore for A Louisville Kentucky Mortgage Loan Approval

Score Plus/Rescoring

Score Plus – Rapid Rescore – The Score Plus program allows Credit Plus to update credit information with the three national repositories in 5-7 business days. Credit Plus will forward documents supplied by your borrower directly to Equifax, TransUnion and Experian for a rush investigation. The repositories will update credit information and trade lines on their credit reports.

How long does it take to update credit information? While Score Plus is unable to guarantee a completion date, turnaround time to update credit information is typically 5-7 business days from the time your request is received. If the bureau rejects the documents, you will be promptly notified. 

What types of credit information can Score Plus update?
Given a verifiable document from the creditor, Score Plus can:
Remove derogatory information and accounts that were reported in error
Update an account that has been paid in full and closed
Update the status of a collection
Update a balance or paid-in-full status
Update an account to show that it was included in a bankruptcy
What documentation is required for Score Plus?
Bureaus require that all documents submitted:
MUST be typed on the creditor’s letterhead
MUST come from the creditor reporting the account
MUST state specifically how the information should be changed
MUST include the date, complete account number, and the name and contact phone number of the creditor

How to Get a Copy of My Credit Reports

By far, the most frequently asked question received at is "where do I get a copy of my credit report?"  Many people are confused because so many websites are offering free credit reports, but require consumers to sign up for credit monitoring or other services that cost a lot of money just to get a free credit report.  I will tell you how to get a truly free no strings attached credit report and you can thank former President George W. Bush for your free credit report.  President Bush thought people should receive one free copy of their credit reports each year, so when he was president, he had a law passed requiring the three major credit bureaus -- Equifax, Experian and TransUnion -- to give all consumers a free copy of their credit report once every 12 months.  To comply with this law, the three credit bureaus created a website where consumers could get their free credit reports online.  The website address is  Now this doesn't mean that the credit bureaus aren't going to try and get some money from you.  If you visit the site and order your credit reports you will see buttons that try and get you to order your "free credit score" and credit monitoring and other services.  You don't really need any of these services.  The credit scores they offer at this site are the credit bureau credit scores and NOT the FICO credit score that lenders use to approve your home and auto loans and new credit cards, although the credit bureaus' credit scores are probably not that different from the FICO score.  

When you visit you will have to order your three different credit reports separately.  Each time you finish ordering from one credit bureau you need to click the link that takes you back to the website to order the next one.

Tips for Increasing Credit Scores

Tips for Increasing Credit Scores

Do you have past due balances that have been neglected? If they are showing up on your credit report and you want to purchase a home, you need to make sure the balances in question are brought up to current status in all situations possible.

Do you have outstanding debt that you can afford to pay off right now? You should try to get these accounts down to a zero balance, or at least a lower balance. If cash on hand doesn’t allow this, you can try to distribute the debt among other open credit cards. You can also consider opening a new line of credit and transferring part of the balance off a card that is close to being “maxed out.” If you can get the resulting balances below 50% of the available credit, you are on the road to improving their credit score considerably in most cases.

You should not close existing credit card accounts, even if you don’t want to deal with the company any more… Believe it or not, the credit history is a good thing to have!

When married couples keep separate credit card accounts, some or all of the balances can be transferred to one spouse’s list of accounts. This gives the other spouse an opportunity to increase their credit score and designate him or herself as the sole borrower on the mortgage loan. Ownership of the home can remain in both names.

See if your credit providers will increase your available lines of credit. This can, in turn, increase the overall available debt ratio, and increasing your score.

Do you have past dues and charge-offs within the last two years? They should be paid off now, if possible! Past dues older than two years will have little to no impact on credit score if they are paid, but can possibly bring the score down, if they aren’t paid. Focus on that 2-year time frame.

Do you see errors in your report? You should request the credit bureau delete any outstanding debt that is incorrectly charged to them, or things that should have been removed that have been paid. The credit bureau has an obligation to reconcile this within 30 days. If you see items on your report that are less than two years old and you have the money to pay it off now, mark the back of the payment check with the following notation: “Accepting this check is evidence that the transaction is complete and this charge will be deleted from my credit record.” If necessary, this cancelled check can be used as proof of the transaction in the event the outstanding debt is not removed promptly and interferes with the closing of your loan.

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

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5 Ways to Rebuild Your Credit Score

5 Ways to Rebuild Your Credit Score

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

Fill out my form!

How often does your credit report change?

How often does your credit report change?

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