About Credit


What’s a Credit Score?

Your credit score is an important factor when a lender is determining whether to approve your loan application. It impacts how much you may be pre-qualified/pre-approved for and what the interest rate will ultimately be on your home loan.

Your credit score, specifically named the “FICO credit score” after the Fair Isaacs Credit Organization, is a value that ranks your credit worthiness. The number ranges from 300 (low score) to 950 (high score) and is based on credit information gathered and stored by the three national credit bureaus: Equifax, Trans Union and Experian. All of your creditors (banks, credit unions, credit card companies, collection agencies, etc.) provide information to these bureaus regarding your payment history. It is important for you to conduct an annual “quality review” on your own credit report to ensure that all the information is accurate. Occasionally, creditors may make a mistake in their reporting, so by checking your credit report annually, you can ensure that any issues are addressed in a timely manner. Generally, the higher your credit score, the better your interest rate will be.

Why Is My Credit Score So Important?

The three credit bureaus typically use the same statistical model for everyone, that is, the Fair Isaacs Credit Organization model. This model analyzes your credit worthiness by applying scores to your credit patterns. Creditors and lenders then use those scores to make predictions about how responsible you will be about making payments in the future. Each time you are granted a loan, the lenders, creditors and credit organizations continually monitor your payment performance. They use this information to establish your credit score. It’s important to pay all of your bills on time and as directed, because on-time payments show up in your report and will result in a more favorable credit rating for you. Late payments also show up and will not only cause a drop in your credit score, but could also cause increased interest rates with your creditors. Also keep in mind that your creditors, such as banks and credit card companies, monitor your score from time to time. If they notice a late payment — even with another creditor — they can increase the rate you are charged without even notifying you.

Tips to Keep in Mind

  • Start being a responsible credit card holder! Your most recent credit problems affect your current credit score the worst.
  • Learn from your mistakes! Repeated credit problems also damage your score badly.
  • Don’t forget your “joint ventures”! If you have joint credit cards or loans (e.g., you and your spouse), each of you is equally responsible, regardless of who pays the bills.
  • Pay off your credit! To the credit organizations, your large outstanding balances mean risk.
  • Try to stay under 50% of your credit limits! High balances also represent risk.
  • Make your loan payments on time! Finance companies affect your scores worse than credit card companies.
  • Avoid “buy now, pay later” offers! They create debts that you postpone paying.
  • Try not to own more than two or three credit cards! Too many represent potential risk.

Get Your Credit Report

Mobley Homes encourages you to review the credit information gathered by each of the three bureaus on an annual basis. Contact them or visit their websites today:

Equifax Information Services LLC
1-877-SCORE-11
www.equifax.com

Experian
1-888-397-3742
www.experian.com

Trans Union LLC
1-800-888-4213
www.transunion.com