Credit Score ????

Question

there are three CRA'S if I get my score will they all be the same,if not do I need to get all three and go with the highest one. I 'm thinking about a new car and house financing for next year. Which one should come first? Also what's the best way to get your score.

Answer 1

I have been a mortgage broker at Countrywide home loans for 2 years now.

There are three major American credit reporting agencies.

TRANSUNION
EXPERIAN and
EQUIFAX

Transunion usually gives you the lowest score, Equifax the middle score and Experian the highest score.

When you want to buy a house, the score that matters the most is the middle score. As long as your middle score is above 680 (between 680 and 900), You are fine.
That means you have B+ credit or better.
You'll be able to qualify for most loans ( as long as you have good income) and you'll also qualify for good rates.

However, if your middle score is below 650, the banks will closely review your application when its in underwriting and will make sure you've been paying 90% of your bills for the past 2 years on time. If not, you'll be denied.

As for car loans, so long as the car is below $50,000 it is very easy to get a car even with 580 scores.
My friend Julio was able to buy a $44,000 Chrysler 300C brand new with $8000 down even with a 560 middle score.
Basically, the car industry is in such bad shape, they will qualify anyone for New or used so long as you have sufficient income and a decent down payment.

My recommendation is you buy the house first and either use some equity to buy a car or take out a large enough loan to buy the car outright and just have a larger mortgage for the house.
The reason I say this is because you end up with one large mortgage rather than a mortgage and a car payment to pay each month. Trust me, its better to do it that way.
The major reason for this is because when you want to finance the house, your DEBT TO INCOME Ratio is extremely important and will make the difference between getting the house and not getting the house.
The typical car payment is about $400 a month. Unless your total debts cost you less than half of your monthly income, the bank will hold high monthly payments against you in ways you couldn't imagine.
I can't tell you how many people have knocked themselves out of home loans because of a huge monthly car payment that needed to be made.


thanks MEJ - she reminded me to tell you that when you search for your loan, you should consider going to a broker rather than a bank. The difference is that a broker pulls your credit ONCE and uses the scores to shop around with numerous banks -wherin each individual bank will need to pull your credit to give you a quote. The broker does charge a small fee, usually between 2 and 4% of the loan, but they can actually qualify you for loans with lower interest rates than a bank will give you - this is because a broker brings VOLUME to the banks and thus gets special privaledges.


Also be careful dealing with real estate agents and aggressive bank reps becuase they are interested in selling you the home regardless whther you can really afford it or not. They make a large commission off your purchase and ultimately they just want to get paid. Plenty of people here in New York have gone into foreclosure because they got their houses due to excellent credit but didn't have the proper finances to support their purchase.




As for getting reports...some people use free credit report.com but that site sucks in my opinion. I use CIS reporting for all my customers. Credit reports cost me about $9.


CIS 1-800 - 275-7722

Answer 2

I'd not spend the $$. When you apply for a loan the lender will pull the report. As long as you score over 580 for FHA or 620 for conventional financing, have no out-standing late pays for the last 12 months, no charge-off debt, you should be fine with the home loan. You already know if you have a good payment history or not, or you should because you make the debts and you pay them. The lender will tell you if you have a problem and what needs to be done to correct it. So relax a bit. They will pull reports from all three of the major reporting agencies and average them together to determine your risk for the loan. Each agency will have a little different rating and info to report.

If you want to buy a car be careful as the debt can- and will go against you for the home loan. The home loan works like this: they take your gross income for the last yr X 29% (FHA) divided by 12= your potential max home payment. Then take 39% of the gross income divided by 12 and you have the total debt (home, credit cards, child support payment and all other unpaid debts). This represents the total debts you can have and still make the house payment. If you go over that you will get less home than you want or no home at all because there are none in the price range. So a $300.00+ car payment can knock you out of a really nice home buy opportunity. If that happens you'll never look at the car the same way again- and your spouse will never look at you the same again either.

Credit rating is all about the risk of giving you the loan,. The higher the risk to the lender the higher the interest rate charged to no credit being extended. Sometimes a home loan is considered a high risk but reasonable at a higher interest rate. That is called B/C lending. Do all you can to avoid that. If you are denied credit you will be entitled to free credit reports from the reporting agencies that upon receipt of your written challenge to the reporting agency they have 30 days to investigate and reply or remove the negative info. Amazing, the people who fail to challenge bad reports they know to be untrue and then wonder why they have issues with obtainig credit. Also be aware that if you co-sign for someone that is also counted as debt against you, as you too are liable in case of their default in payments.

Consider the choices, consider the outcomes, and choose wisely.

Remember that your credit rating is a direct result of decisions YOU made, nobody else is at fault for it good or bad, unless you had your credit hi-jacked (which if less likely that you ruining it yourself) and they ran up incredible debt using your info. Lenders want to loan money, they just need a good reason to. You can also negotiate the interest rate at a dealer unless it is already special interest rate. Alternately Capital One has great on-line credit for cars at very good rates for those that qualify.

Answer 3

DSLcobra offered some really good information. Allow me to expand a bit however.
From a geographic perspective, businesses are divided into 3 parts of the country. Some use the "HOME" office, others the "branch office". The west, mid, and east. All 3 bureau's may or may not have you on file, it depends on whether or not the business uses a specific CRA. Some use all three, some only 2, etc. That being said, in most cases, your credit score will never be the same with all three. So, when "cobra" was explaining about the low, mid, and high score, he left out that the "final score" used for a home, or car is a "blended score". More specifically with a mortage, they will pull all three, and that is often where the nightmare comes in for the borrower. When EQU has a lower score, than say, EXP it may be a reflection of some derog that was only reported to EQU, or vice versa. Of course this would apply to the good credit as well. :)The borrower then has to "jump through hoops" to clear up any discrepancies from all three bureaus. On the flip side of that coin is the geography previously mentioned. If you just moved from say, the east coast to Washington state for example and you apply for a loan to buy a house. You will list your last address, usually 2+ yrs or more as back east. The "WEST coast lender will pull your credit from his CRA which, unless SPECIFICALLY requested will only go to the geographical areas of the west coast region. What this does, and it can really SUCK, is you have excellent credit, FICO of say.. 820, but only a few tradelines are showing up that are closed and old. Thats a result of "geography" and it can go the other way as well.
Under the "full faith and credit act" of the US, everyone is entitiled to a FREE CREDIT REPORT FROM EACH CRA. You go direct online to each of their websites and it is very simple to order and or retrieve your report instantly. Follow the prompts and you could have it within 10 min.
"Cobra" info was correct, buy the home, FIRST. Debt to income is structured much differently for a home than the qualifing factors to buy a car. Use duck tape and bailing wire if you have to until the home closes escrow, then get the car. Besides, a homeowner on an app hold a few points better score.. Also, don't payoff your credit cards. You will have a higher score if the credit line vs the balance is low. 5000 credit limit, 5000 balance, =bad
5000 limit, 200 balance with on time payments = GREAT.
Paid in full loans do not support a CURRENT pay record. They simply say, zero balance, and if late or not, but an open loan with chump size pmts, over time, on time with 95% limit still available is a "gold star" on credit decisions.
Between Cobra and myself, you have quite a wealth of info on this. What you don't understand, don't hesitate to ask.
My qualifications.... well, it really doesnt matter, but my guess is that "dlscobra" may have worked for me at one time...

Answer 4

I'll address this point by point

1) The three scores will all be different. All 3 bureaus are not given the same information about you. It is your responsibility to know what your reports say and to correct any errors.

2) The middle of the 3 scores is the one that matters. Not the average, but what ever the middle score is. So if you have 610, 640 and 642 = your middle score is 640 and that is your score. If you have 700, 710 and 760 = your middle score is 710 and that is your score.

3) I would get your reports direct from the bureaus them selves. All three have internet sites you can go to for purchasing your reports.

Answer 5

When you apply for any loan for any reason the lender will request you credit score. Different agencies could very well be holding different scores. It all boils down to what information they've collected. Go to FreeCreditScore .com

Answer 6

About the financing house and car.

You should finance the house first, then car.

About the credi score, depend your lender have the contract with one of the three credit report bureau.

One of the most important thing is. from this point on, you should keep your credit record clean

Answer 7

dslcobra has the best answer - but i just want to add that pulling your credit multiple times will be detrimental to your score, as well as opening new accounts (buying the car) before the house - that will add more debts to your application. be sure not to pull the credit more than once a month. also if cloing accounts, do not close more than one per month.

Answer 8

They have three and they will all be different. If you get all three, the middle score is what they look at, but I wouldn't buy them b/c they differ from company to company.
The house would be your best bet b/c loan companies look as the house builds equity and they can always get their money back as a car looses value.

Answer 9

the three cra's are expierian, equifax, and trans union, each will have a different score for you, as a rule equifax always has the lowest score and most lenders tend to use the lowset score , good luck, ,

Answer 10

DSLCOBRA is the winner! He has the best and most thorough answer by far!