If you have a minimum of 20% to 25% equity in your property, in certain cases we can approve you for a loan with no credit scoring based solely on your good mortgage payment history and liquid financial reserves.

How are credit scores determined? What is the highest credit score possible? What credit score do I need for a mortgage? Why do I have three different credit scores? What do my credit scores mean? These questions are all very common questions regarding credit scoring. Read through this web-page and you will discover the answers to the above questions and many more. Your credit score is based on a number of different variables such as your payment history, your credit utilization, variety of credit, number of credit inquiries within a certain period of time, length of your credit history and the amount of credit you have available to you.

Do credit inquiries affect my credit score? This is one of the most confused and commonly asked questions by consumers shopping for a mortgage. The answer to this question is yes and know. How can the answer be both you may ask? Applying for a lot of credit cards and such will result in a credit inquiry each time you apply. This will in turn result in a negative affect to your credit score. However, if you are shopping for a mortgage or an auto loan, the credit repositories realize that most people are applying with multiple companies to find the best deal out there and they will allow the consumer a 30 day window in most instances to shop around for a mortgage loan and have their credit pulled by as many mortgage companies as they want to find the best deal. All of these inquiries for a mortgage within that 30 day window (30 day window starts with first mortgage inquiry) will only count as one inquiry however for credit scoring purposes. All of the inquiries will still report to your credit report as inquiries so that you can always see who is pulling or has pulled your credit, they just simply will count as one inquiry for credit scoring purposes though.

Designers of credit scoring models review a set of consumers – often over a million. The credit profiles of the consumers are examined to identify common variables they exhibited. The designers then build statistical models that assign weights to each variable, and these variables are combined to create a credit score. Models for specific types of loans, such as auto or mortgage, more closely consider consumer payment statistics related to these loans. Model builders strive to identify the best set of variables from a consumers past credit history that most effectively predict future credit behavior.

There is much misinformation regarding inquiries and how they effect your credit score. Many mortgage loan officers tell applicants not to have their credit pulled again as their score will immediately drop x number of points if they do. This is a technique, of course, for the loan officer to keep the applicant from shopping with other lenders. Much of the problem lies in the fact that the credit scoring bureaus do not want to give precise information as to how the scoring works. They withhold this information with good cause because they want the scores to be a true evaluation of risk, not something that can be easily manipulated. This much is known. The scoring system understands that consumers shop for credit and should not be penalized for trying to find their best situation. An applicant’s credit report can be pulled multiple times during any one 15 day period and for scoring purposes it only counts as one inquiry. Please keep this in mind when looking for a mortgage loan and understand that the lender or broker must see your credit report before they can determine what loan program is best for your situation or quote your a rate with any accuracy.

Credit scoring is a scientific method that uses statistical models to assess an individual’s credit worthiness based on their credit history and current credit accounts. Credit scoring was first developed in the 1950s, but has come into increasing use in the last two decades.

Credit scoring has been utilized by lenders for over 30 years. Credit scoring is a technology used by credit grantors to qualify the risk associated with extending credit to a given borrower. Risk is quantified by means of a score card which calculates a numeric value, or score, for a credit applicant a lender wants to evaluate. Score calculation is done based on information that has been determined to be indicative of future credit performance. There are many types of scoring methods currently utilized today including credit scoring, applicant scoring, behavioral scoring and several others. The type most relevant to the mortgage industry is credit scoring and among the most widely recognized is the fico score.

Different credit scoring models are simply different ways of calculating a credit score based on the same information contained in your credit report.

A common misconception about credit scoring is that multiple mortgage inquiries will negatively impact your credit score. Inquiries within the same industry such as the mortgage industry within a 30 day period are counted as one credit inquiry. Factors such as recent delinquencies, credit card balances close to their limit’s, or a limited credit history have much more impact on credit scoring. The major credit agencies have this information posted on their web sites.

credit scoring was originally used for credit card risk assessment. Mortgage lenders have been using credit scoring since the early 1990′s to determine the default risk of a particular borrower. Some loan programs, such as FHA loans and some portfolio lenders, will assess the total credit history rather than solely using credit scores.