Your credit is one of the most important indicators in today's complex society.
Your credit is based upon past payment history that is recorded in a file or a
report. Credit can be used to see if you are a good candidate for a home loan,
credit card, auto loans, etc. Future employers also use credit to determine if
you are a good fit for a job.
Individuals with higher credit scores have access to better loans than
individuals with lower credit scores.
Here at Lowcountry Home Loans, we know how the credit model works and we
know how to put you in the best situation to improve your credit. We also
understand that some things are out of your control. Our goal is not only to get
you the best loan product on the market, no matter your credit score, and get
you the house. But to also educate and help you understand how to improve your
overall credit scenario.
Use the following link to check your own credit:
Check My Credit
We are able to use the same credit report to qualify for the home loan.
***Disclaimer - the credit report link is $29.16 per person***
Credit scoring is a system creditors use to help determine whether to give you
credit. Information about you and your credit experiences, such as your
bill-paying history, the number and type of accounts you have, late payments,
collection actions, outstanding debt, and the age of your accounts, is collected
from your credit application and your credit report. Using a statistical
program, creditors compare this information to the credit performance of
consumers with similar profiles. A credit scoring system awards points for each
factor that helps predict who is most likely to repay a debt. A total number of
points -- a credit score -- helps predict how creditworthy you are, that is, how
likely it is that you will repay a loan and make the payments when due.
The most widely use credit scores are FICO scores, which were developed by Fair
Isaac Company, Inc. Your score will fall between 350 (high risk) and 850 (low
Because your credit report is an important part of many credit scoring systems,
it is very important to make sure it's accurate before you submit a credit
application. To get copies of your report, contact the three major credit
P: (800) 685-1111
P: (888) 397-3742
P: (800) 916-8800
These agencies may charge you up to $9.00 for your credit report.
You are entitled to receive one free credit report every 12 months from each of
the nationwide consumer credit reporting companies – Equifax, Experian and
TransUnion. This free credit report may not contain your credit score and can be
requested through the following website: https://www.annualcreditreport.com
Credit scoring models are complex and often vary among creditors and for
different types of credit. If one factor changes, your score may change -- but
improvement generally depends on how that factor relates to other factors
considered by the model. Only the creditor can explain what might improve your
score under the particular model used to evaluate your credit application.
Nevertheless, scoring models generally evaluate the following types of
information in your credit report:
- Have you paid your
bills on time? Payment history typically is a significant factor.
It is likely that your score will be affected negatively if you have paid
bills late, had an account referred to collections, or declared bankruptcy,
if that history is reflected on your credit report.
- What is your
outstanding debt? Many scoring models evaluate the amount of debt
you have compared to your credit limits. If the amount you owe is close to
your credit limit, that is likely to have a negative effect on your score.
- How long is your
credit history? Generally, models consider the length of your
credit track record. An insufficient credit history may have an effect on
your score, but that can be offset by other factors, such as timely payments
and low balances.
- Have you applied for
new credit recently? Many scoring models consider whether you have
applied for credit recently by looking at "inquiries" on your credit report
when you apply for credit. If you have applied for too many new accounts
recently, that may negatively affect your score. However, not all inquiries
are counted. Inquiries by creditors who are monitoring your account or
looking at credit reports to make "prescreened" credit offers are not
- How many and what
types of credit accounts do you have? Although it is generally good
to have established credit accounts, too many credit card accounts may have
a negative effect on your score. In addition, many models consider the type
of credit accounts you have. For example, under some scoring models, loans
from finance companies may negatively affect your credit score.
Scoring models may be based on more than just information in your credit report.
For example, the model may consider information from your credit application as
well: your job or occupation, length of employment, or whether you own a
To improve your credit score under most models, concentrate on paying your bills
on time, paying down outstanding balances, and not taking on new debt. It's
likely to take some time to improve your score significantly.