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Credit Scoring
Credit scores and your mortgage approval
A credit score essentially is a numerical “score” based on one’s ability to pay credit/debt over time. It is used by lenders to assist them in determining which loan program and interest rate can be made available to you.

The mortgage industry started utilizing "scoring models" in the early 1990’s. The use of scoring models in the mortgage industry came about as the major secondary market players known as Fannie Mae and Freddie Mac developed new automated underwriting systems. Those systems compare payment histories from literally millions of similar loans coupled with the credit score of the applicant.

The early creators of the automated underwriting systems believed that, if someone could go to a Mercedes dealership at 10 am and drive off the showroom floor an hour later with a $100,000 car (a depreciating asset), they ought to be able to obtain a home loan (an appreciating asset) the same way. The mortgage industry has been slow to adapt, but finally scoring models now figure prominently in the future of how people obtain home mortgages.

There are three major repositories of credit and background information: Equifax, Experian and TransUnion. When a consumer obtains credit, the creditor reports the payment history to these repositories. This is generally done monthly.

These repositories simply accept the information as it comes in electronically. This is very important to remember, they DO NOT check the accuracy of the information.

We have lots of information in this unveiling of credit mysteries; we hope it proves helpful to you. Help yourself to the information provided.

Carmel Mortgage has the best loan programs available anywhere. We hope you will think of us when you, your friends or relatives are shopping for a loan.
  Carmel Mortgage
29 Navajo Drive
Salinas, CA 93906
Phone (831) 275-0380
Fax (831) 536-1803

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