Some of you may already know this but for those who don’t some recent changes are being made to the way FICO scores are being tallied. On August 7th, Fair Isaac Corp announced that it will discontinue using in its credit score calculation any unpaid bill reports where the bill was actually paid in its scoring. In addition it will give less weight for any unpaid medical bills. So if you have a client with a credit score on the edge of loan qualification and where trying to get qualified but couldn’t this might be the break they need. The new scoring model will roll out later this fall so check with your loan Brokers for more details on this issue.
How to Get Your Credit Report
Checking your credit report every year is a good idea; you can catch errors or fraudulent activity before it gets out of hand. If you’re planning to borrow money for a big purchase like a car or home, check your credit about six months before applying for the loan. Cleaning up or repairing your credit can take a minimum of 30 days and often much longer, so you’ll want to know early if your report is less than glowing.
The three major credit bureaus that keep track of your credit history are Equifax, TransUnion and Experian. Lenders report your payment activity to the bureaus and are allowed to request and review credit reports when they are considering granting credit. One credit report is usually all you need if you just want to get a general idea of how you rate. However, since the information in each of the three reports can vary, you should order one from all three bureaus if you want to know exactly what each one is reporting.
The Fair and Accurate Credit Transaction Act (FACTA) allows for all consumers to receive a free copy of their credit report from each of the three credit reporting bureaus every 12 months. Reports can be ordered through www.annualcreditreport.com or by calling 877-322-8228. You will not be able to receive these free annual reports by contacting the credit bureaus directly. However, if you’ve been denied credit within the last 60 days, you may be entitled to receive copies of your credit reports. Find out which of the three bureaus was used by your lender, and then contact that bureau for your report.