Awhile back I posted that I plan to begin rehabbing properties after the first of the year.
My credit score is currently 580 (Chapter 7 discharged last Feb. Score the day I filed was in the low to mid 700’s). I plan to have 10,000 in cash at the time I want to purchase my first property.
My question is this. I have purchased all 3 credit scores through myfico.com. At the time of purchase (11-18-05), my scores were 596, 566, and 555. I checked them again last night, and they are 596, 580, and 555. Which of the 3 scores do you feel is the most reliable? I have mainly been focusing on the middle one-I assume it’s the safest one to watch. I have a plan in full gear that should have my credit going up every month from this point on.
I got pretty excited to see the change of 14 points in the one score since November 18th!!
I am sooo ready to get this ball rolling, and plan to spend the next few months reading, asking questions, and learning all that I can, but I do not want to feel like I am wasting money watching my scores this way…
also, most conventional lenders are going to look at your middle score… most Hard money lenders or private money investors are going to look at the project…
still,
The components of FICO are:
Payment History - 35%
Amounts Owed - 30%
Length of Credit History - 15%
New Credit - 10%
Types of Credit Used - 10%
What can affect your score?
1 - High outstanding debts - keep balances low on credit cards and other revolving credit.
2 - Late payments - note that paying off collection accounts will not remove them from your report. These accounts will stay on for seven years unless you get a letter of deletion from the collector.
3 - New accounts - If you’ve been managing credit for a short time, don’t open too many new accounts too rapidly
I would like to note that the online Personal Credit; my fico, etc are a joke. They are fine for helping you clean up your credit. The scores are worthless.
I have a client that subscribes to my Fico and it says that her scores are 715/690/675. She has been monitoring and working diligently to raise her scores. When I pull her credit it shows 600/585/560.
I think that the online company’s need to be a little more forthcoming in the fact that their scores are worthless. My client contacted them and they admitted that there are different scores and that they could not help with those. Only her “personal” scores.
Don’t be misled by these agencies! They are great for monitoring activity. However, do not lay too much creedence to their scores.
Also, be careful with these companies that help you raise your score. You can do the same thing at little to no cost.
I am so sick of lenders using only FICO’s to rate people!!! Me and my wife have great jobs that we have been at for over 15 years, we make almost $100k between us, we have about 10% DTI and because some idiot we sold a business to defaulted on the note, our FICO’s suck. We cant get a loan to buy our way out of town or to get a new car. Every mortgage broker I talk to about doing a refi on our home, says they can do it even when I tell them the scores and then when they pull my credit (which lowers my scores even more) they deny my loan.
I wish they would use a combination of DTI, job stability, income and FICO’s. It would be a lot better for good people like us that have had some bad luck!!!
Ok, now I have vented. I know it will never change so I will put my rose-colored glasses back on and try to make millions in REI.