AZ Real Estate - Credit Scores

Gary Scott

Phone
(480) 948-0550
Mobile
(602) 402-8594
Toll Free
(866) 464-2140

E-Mail Us

John Hall & Associates

9366 E. Raintree Dr. #101
Scottsdale, AZ 85260

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Contact Info.

Gary Scott

Phone
(480) 948-0550
Mobile
(602) 402-8594
Toll Free
(866) 464-2140

E-Mail Me

John Hall & Associates
9366 E. Raintree Dr. #101
Scottsdale, AZ 85260

Scottsdale Real Estate, Phoenix Real Estate, Scottsdale Homes for Sale, Scottsdale Az Real Estate Listings, Scottsdale Az Homes

AZ Real Estate - Credit Scores

What type of credit do you need to qualify to purchae residential real estate in Arizona?

Your credit is very important when it comes to determining mortgage eligibility. What you may not realize is that your credit rating is a factor in several other areas as well, such as home and auto insurance. Your score is determined by several factors; with the most important being the amount you currently owe and your payment history which is usually comprised of credit card debt.

There are 3 main bureaus to which most creditors such as credit card companies, banks and leasing agencies provide information. Each month, your credit holders report information to these credit bureaus about your current balance, minimum payment requirement and payment history. Each bureau reports a slightly different credit score which potential creditors will typically use the middle of the 3 scores to determine loan eligibility. The highest credit score one can achieve is the magical FICO number of 850.

35% of your score is determined by payment history
30% is based on how much your owe on credit cards
15% is based on the length of your credit history (the older the better)
10% is based on the type of credit (mortgage=good while credit cards=bad)
10% is based on new credit (several newly opened accounts will lower score)

Credit Scores and what they mean to you:

730 and over	Wonderful, you are at the top. You are eligible for the best rates and terms.
700 - 729	Excellent score. You are a desirable borrower.
680 - 699	Good credit. You should be in strong shape to buy.
660 - 679	Okay credit.. Don't look for other exceptions.
640 - 659	Borderline. Okay if everything else is strong.
620 - 639	Weak. The rest of your file must be perfect.
600 - 619	Difficult. Needs some work or a special program.
Below 600	Trouble. Try to fix your credit.

Here are the top four payment traps you should be concerned about:

Retroactive Interest Rate Increases: card companies can adjust interest rates in response to missed payments or negative changes in your credit report
Universal Default Rate: Your card company is in the habit of reviewing your credit report periodically and may observe where you've fallen behind on some other bill. The card company can use your delinquency as a reason to increase your interest rate even though your payment history with them is excellent.
Pay Lower Interest First: There are situations where you card issuer will charge you a different interest rate on a certain portions of your balance.
Due Date Trap: Sometimes card companies depend on consumers being not paying attention to due date or minimum amount due. Once a statement due date is missed, the consumer's credit card interest rate is increased to a ridiculous high default rate along with a late fee penalty assessed to the account.

Your credit card disclosure statement contains a lot of small print - stay informed because your credit matters.

There are many avenues for you to obtain a copy of your credit report. You should review it at least yearly to see if there is anything you may want to dispute. Don't wait until you want to get that home loan or other major loan to find something erroneous on your credit report!