Whats in a Number?

by admin on April 20, 2010

creditcrunch1BC Mortgage requirements have adjusted as of April 19, 2010.

The following article was provided by First National, a major mortgage lender in Canada.

While most consumers know that they have a “credit rating,” not all know their scores or how they were calculated. If a client’s mortgage application is refused or approved for less than expected, there’s an opportunity for you to help the client understand the causes and how to improve the score.

Borrowers may not know that their creditworthiness is assessed two ways:

1. Their Beacon score, and
2. A detailed history.

Credit scores range from 350 (low) to 850 (high), with 750 being the median. The numerical score is calculated on previous payment history, current indebtedness, credit history length, number and frequency of new credit inquiries and, types of credit held. Two so-called “Beacon killers,” are payments more than 30 days late (even small amounts) and maxed-out credit cards. The detailed history adds personal information, banking information and specifics on accounts and payments.

Repairing the client’s bruised credit may not be easy, but over time it can be done. Here are three strategies to recommend:

1. Pay all bills on time – late payments hurt ratings
2. Keep credit balances below 75% of the maximum
3. Avoid applying for additional credit; too many applications in a short period signals financial difficulties

Clients should also review their credit histories at least annually, which is free when requested in writing or by fax.

{ 1 trackback }

Tweets that mention Credit Score - Whats in a Number | Vancouver Mortgage Blog -- Topsy.com
April 20, 2010 at 1:09 pm

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: