If you have bad credit history and are looking to get a home mortgage loan, then chances are you are going to need to know all about how the Fico credit scoring theory works.
Fico - Fair Isaac & company - is the leading credit reporting group that lenders turn to when it comes time to credit scoring your home loan mortgage application; so if you do have bad credit history, these guys will know.
Mortgage
The recipe used by Fico cannot be disclosed because of a decision made by U.S. Congress. There are some things commonly known about Fico which that could help you understand why and how you can get approved:
1. The higher your Fico score, the best chance you have of getting that home mortgage loan. Also, the higher your score, the more room you have to negotiate a lower interest rate.
2. If you have a Fico score lower than 500, there is very puny chance you'll be getting a mortgage home loan.
That said, if you have a score of:
500 - 600 you should be able to get a home mortgage loan, in case,granted you are willing to make a down payment.
600 - 640 You should get a 100% home loan financing. Thats right, with no money down.
640 - 700 You should be able to be approved for a 125% home mortgage loan.
700+ You're in the drivers seat! You should be able to get an excellent rate with excellent terms.
3. Fico depends on each credit report, so before you apply for a home mortgage loan, if you have bad credit history, get a copy of your credit article and make sure there is nothing on there that shouldn't be there. If there is, get it changed before you apply for the home mortgage loan.
4. Wait until after you have purchased or refinanced your home before you buy whatever added on credit. More loans or higher balances can have a dramatic result on your mortgage approval, regardless of either or not you had over a 600 Fico score before you bought on credit.
5. Remember, the Fico score is only a part of your home mortgage loan application, so if at first you don't result in getting your home loan mortgage, don't give up. Some lenders may still be willing to lend to you!
People with bad credit often don't understand how the credit scoring theory works. It is useful to find out more about it when looking to get a home loan with less than excellent credit to bad credit or when dealing with sub prime mortgage lenders.
To view our list of recommended bad credit mortgage lenders online, visit this page: Recommended Bad
Credit Mortgage Lenders
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