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Written by Becky
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Friday, 21 September 2007 |
What is credit? Credit is the determined ability of a person to be able to maintain and pay off a loan. Normally this determining is made in the form of a 3 digit score; the most common heard of is the FICO, from the Fair Isaac Corporation, who base ratings on the following: 35%-how regular person has been in paying past loans, bills, credit cards, etc. 30%-current amount of debt they have, or normally seem to have 15%-their span of credit history 10%-types of credit they have used 10%-new credit and amounts of credit obtained by them Of course, there are other factors that influence this score, such as foreclosure, bankruptcy, tax liens, court judgments, and potentially having multiple credit accounts. Having made numerous checks on your credit can also affect the score, although agencies do make certain allowances for this. Employment history and current income do not affect the score as much as one would think, but unemployment without any other source of income will not be approved, no matter the FICO score.The average of score for most is in between 600-700, with those above 680 being considered good/acceptable. Any score right below 620, will be an obstacle but mortgage qualification is still possible. In general, anything under 499 is deemed insufficient for loan approval/credit. The general rule of thumb with credit is the higher the better.
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