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This article brought to you courtesy of Robert Grove, Senior Mortgage Broker at Minuteman Mortgage, News-Times Insider Mortgage Expert.

Robert Groves

When it comes to buying a home or any type of consumer product that requires financing, a credit report is pulled to check the creditworthiness of the consumer. Mortgage lenders use the lowest middle FICO score for the loan. Why does that score matter? Lenders want reassurance that their loan will get paid back. High FICO scores prove the consumer has reliably paid off past debts and has a great history of doing so.

The typical credit score range falls between 350 to 850, where 850 is a perfect score, excellent is between 750-850, good 700-749, fair 650-699 and poor 650 or less. Interest rates are based on credit scores. The better the score, the lower the rate.

Scores are calculated by Experian, TransUnion and Equifax. Their scores are roughly similar yet pulled from different sources. Here are the main variables that are used to calculate a FICO credit score.

Payment history 35%, Debt-to-credit utilization 30%, Length of credit history 15%, credit mix 10% and new credit accounts 10%. A 30-day late payment can drop your score as much as 90-110 points. Having a balance over 30% of your credit line can lower scores. Closing a credit card that you've had for years lowers scores since the history is erased. Scores tick with a great credit mix of home and car loans and credit cards. Opening several new credit accounts decreases your length of credit history.

To see where you are, get your free report at AnnualCreditReport.com.

Robert Groves, Senior Mortgage Broker

Minuteman Mortgage

5635 N.E. Elam Young Parkway, Suite 308

Hillsboro, OR 97124

602-460-2374

www.MinutemanMortgage.com

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