Understanding Your Credit

Checking your credit report once a year can be as important to your financial

well-being as getting an annual check-up is to your physical health. Your credit report

can tell you if there are mistakes that could make it more difficult or more expensive

to get a loan. It can also tell you who else has been checking your credit. And if there

are active accounts you didn’t open, it can clue you in to identity theft.  Then there is

the financial equivalent of your cholesterol level: your credit score, a number meant to

tell lenders at a glance how much of a risk you are. Before you go in for your annual

financial check-up, here is a look at the basics of credit reports and scores:

Know the score: For many lenders, creditworthiness is boiled down to one thing -

 a credit score. The number, which falls between 300 and 850, tells lenders how likely

you are to repay a loan. About 60 percent of Americans have good credit, defined by a

score of 690 or higher. Twenty percent have poor credit, below 620.

How it can cost you: A low score often means you pay a higher interest rate because

the bank is taking on more risk. For example. if you are shopping for a mortgage, that

can cost hundreds of dollars a month. If you have poor credit, and were to take out a

$250,000 home loan at 8%, you would pay about $1,835 per month. The same loan

amount, for someone with excellent credit, would cost about $1,420 a month at 5.5%.

This is a difference of $415 per month, and $149,400 over the 30-year term.

Source: Fair, Isaac & Co.

♦ Understanding Your Credit  ♦ Loan Options ♦ Pre-Qualify for a Loan ♦

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Valerie Messina, Licensed Mortgage Banker, Carolyn Messina, Certified Mortgage Specialist

Valerie Messina: 973-768-8094; valeriemessina2005@yahoo,com

Carolyn Messina: 201-247-3887; carolynmessina@yahoo.com

This web site is maintained by CJM Consulting Services, LLC, P.O. Box 11226, Fairfield, NJ 07004. MessinaMortgageInfo is not a Mortgage Broker or Mortgage Banker.  This web site was created by Carolyn and Valerie Messina to provide general information on mortgage products and services.

Copyright © 2004 MessinaMortgageInfo.com - Last modified: 06/29/08