When it’s about credit scores, what are the primary fears that cycle around on a general basis? Well, they can revolve around:

Fear of losing a mortgage loan deal because the score was too low. Fear of getting scammed by an online free FICO Credit score report retailer. Fear of hitting bankruptcy anytime soon, at the present demolishing score rate.

Well, good news is that as far as mortgage deals and getting a copy of free MyFICO Credit Score, the situation is not as bad as it looks. A low score has many forms. Lenders like to refer to a person with stained credit as a risky anomaly, a sucky client and probably a long term hassle. However, mortgage loan is one of the best deals that reap the benefits of a good credit score report. Which is why, we need to discuss modes of improving you score and the impact of a good score on a mortgage plan payback policy.

According to Janette E. Jones of American Home Mortgage – Bethesda, “For most people, a mortgage loan is where they’ll reap the greatest rewards from an improved credit score. “For the past two or three years, mortgages have been the lowest in 30 or 40 years, but that doesn’t apply to everybody. That basically applies to people who have excellent credit. Someone who has excellent credit can actually get a fixed rate loan for 5.5 percent. However, for people who have less-than-excellent credit — and I would say that’s anything below 650 (on the FICO scale of 300 to 850) — they’re looking at an interest rate that’s 1 percent higher, at the bare minimum.”

That being said, an ideal score, which is deemed as “good”, is somewhere between 700 – 759 to 760 – 850. Take a look at the following U.S. population chart against credit scores. It’ll help you to assess your position in the market.

% of Population……. Credit Score

2%………….. 300 – 499

5%………….. 500 – 549

8%………….. 550 – 599

12%………….. 600 – 649

15%………….. 650 – 699

18%………….. 700 – 749

27%………….. 750 – 799

A simple breakdown of the above numbers indicate that half people fall below the median (723) and the other half maintains a high credit report. 2% to 3% of the entire U.S. population has a stained credit report. Our prayers are with them, as they won’t be entertained by any notable mortgage loan organization.

You, on the other hand, are viable to fall underneath the 650 – 750 categories. At this stage, you can choose to get 3 free credit score reports from a reliable online platform. It’ll help you to further improve your stance on your current position. As far as the mortgage plan is concerned, we concocted a 30 Year Mortgage Plan, with $200,000 worth.

In above case, your good FICO credit score can save you a lot of money. For instance, if your score happens to be somewhere between 760 – 850, you’ll end up saving $9,378 on the $200,000 30-year mortgage payback policy. It’d mean that you’ll be paying $1, 90,622 on an overall scale.

Meanwhile, if your score is somewhere between 680 – 699, the applicable APR will be 4.574%. You’ll be paying $1,022 on monthly basis, and save up $7,566 on the total deal. Just to clarify the APR debate, there might be a case, which could look like this:

Bank “A” is offering a 30-year Fixed Mortgage Deal @ 6% Interest Rate Bank “B” is offering the 30-year Fixed Mortgage Deal @ 5% Interest Rate

I can bet a $100 that most of the people will think of the second Option as something feasible. Quite honestly, Bank “B” does look good because it has a lower return rate. However, what Bank “B” isn’t tell you about is, its hidden origination fee, which may be $2,000 – $4,000 and a payment of 4 Points on your credit score report.

Bank “A” is good in this case because it doesn’t have an origination fee on the mortgage deal and it won’t be deducting any points.

For more information, visit http://www.bestfreecreditscores.com/. They’ve got informative articles and ways of helping you to get Free MyFICO Credit Scores report(s).

Fair Isaac Corporation is the creator of the FICO credit score that is used today by most lenders to evaluate consumer credit risk. FICO scores range from a poor credit low of 500 to a best credit rating of 850.

The higher the FICO score the lower the interest rates offered by most lenders. For example here is a look at how FICO scores might affect a $150,000 30-year, fixed rate loan:

Score……Interest….Payment
720-850..5.64%….$865
700-719..5.77%…$877
675-699..6.30%…$929
620-674..7.45%…$1,044
560-619..8.53%…$1,157
500-559..9.29%….$1,238

Rates change frequently, but you can check the daily average at myfico.com.

Fair Isaac has extended its FICO score to cover an expanded population base. This expanded FICO coverage will tap into non-traditional sources of consumer data to assess the credit risk of adults who have minimal or no credit history on file – such as recent immigrants, people with low incomes, recent widows and divorcees, and young people.

The company has tapped into non conventional ways of establishing credit scores. People pay rent, they pay catalog companies when they order something, they pay back payday loans — there are various ways people show financial responsibility and Fair Isaac will now be gathering that information to help determine FICO scores.

An estimated 160 million Americans have documented credit histories adequate for calculating classic FICO credit scores. An estimated 50 million consumers do not. Now that will change.

For real estate investors and landlords this means that we should be able to find a few more credit worthy buyers and renters than in the past.

Credit Repair and your Credit Reports

Credit repair is all about knowledge, and your credit reports are the key. There are three credit bureaus, Experian, Equifax, and TransUnion, and they each provide their reports in a different format. In addition, there are many tri-merged reports available which blend the information from all three credit bureaus in a different format. The tri-merged reports are designed to be user friendly and may be your best bet for credit repair.

The Real Score

There is another credit repair resource that gets less notice, but is arguably the most important. This resource is MyFico.com the website for Fair Isaac Corporation the creator and owner of the Fico credit score. The credit bureaus sell their own scores, marketing them with no visible disclosure that they are not the scores that lenders use. These bogus scores are deceptive and bear little resemblance to the genuine scores available at MyFico.com.

The Right Credit Repair Set Up

So, if you want to benchmark your scores, get the scores that count. Ah, but there is a twist. Although you should get your scores from Fair Isaac, their credit reports are the least useful for credit repair. So, I’m sorry to say, but if you really want to do it right buy your scores from Fair Isaac and a good tri-merged report for credit repair information purposes.

Proof Reading for Credit Repair

Once you have your credit reports it’s time to put on your reading glasses and get down to the business of squinting through all of the data that the credit bureaus attribute, often wrongly, to your life. I suggest that you clear your desk or kitchen table, get a pad of paper and a highlighter and make a note of everything you see that is even vaguely questionable. Here are some of the most significant things to look for.

Pushing it to the Limit

Credit card issuers often under report your high credit limits. This seems innocent enough; most people don’t think to look for this innocuous little tidbit, but it has the potential to knock 100 points off your score. Gasp. Check it out. The FICO scoring model places great weight on the relationship between your balance and your limit. If the credit card issuer erroneously underreports your limit your score may be artificially depressed.

Gone but not Gone

Another problem often overlooked are accounts that have been closed and paid but continue to report as open with balances. This is very common and can overstate your current debt load. It is not unusual to spot two or three of these accounts, ranging from mortgages to little store cards. You can easily eliminate these obsolete accounts for a nice little credit repair boost.

Ditching the Dupes

Duplicate accounts are as common as dandelions in the spring, and like old closed accounts that report as open, these bothersome little pests can put a dent in your scores. These accounts appear for a variety of reasons usually stemming from creditors reporting methods and occasional account number changes. Look carefully for these redundant accounts and remove them.

Collections are Iffy

Collections are the most questionable accounts on your credit report. Collectors buy, sell, and even trade debt regularly. Collectors that do not own a collection account, per FTC Fair Credit Reporting Act Staff Opinion Letters, must cease reporting that account. Unfortunately there are no incentives for them to do so, and hence these old erroneous collections can linger forever. Challenge them as part of your credit repair effort.

The Student Loan Solution

If you have student loans that have slipped into default it is time to make peace with your lender. Student loans are different from every other debt. There is no statute of limitation for collection of student loans and hence there is no hope of waiting until they go away. In fact, the situation will get worse with every day you delay. The good news is that you have awesome legal rights when it comes to your student loans including easy rehabilitation and consolidation programs. Call the Student Loan Ombudsman at (877) 557-2575. They are on your side.

Credit Repair Lifeline

Is this too much to handle? If you are too busy to manage your own credit repair project, hire a credit repair professional. This is far too important to ignore. You can’t afford to delay your credit repair project. Every single point on your credit score has an impact on your life, so take care of your credit and your credit will take care of you. Good luck!

Copyright ? 2008 James W. Kemish. All Content. All Rights Reserved.