A Fast Risk Assessment Tool
Credit data alone can make assessing risk a cumbersome process. Using credit scores can drastically cut the time to assess lending risk. Fair, Isaac and Company, is a data analytics company based in San Jose, California focused on credit scoring services. It was founded by Bill Fair, an engineer and Earl Isaac, a mathematician in 1956. Always monitor your credit scores with Experian or Equifax or MyFICO.
A Composite to Quick Loan Decisions
Many loan programs are granted based on credit risk scores which make loan decisions occur in a fraction of the time. The preferred credit score lenders usually require for business financing is 680. The desirable credit score to attain a great mortgage rate is 700 or better. The ideal score to select a fair unsecured credit card with a decent credit limit is 660 or better. If you are determined to obtain large unsecured credit card lines, it is required to have credit scores starting in the mid to high 700s. For Example: An unsecured credit card line of $20,000 or plus
Part of any Underwriting Criteria
Lending guidelines now rely heavily on scoring products. Many automated underwriting systems use score cutoffs as a primary lending criteria. Mortgage lending is one of the best examples of score tiers, the lower your credit score the higher your interest rate will be.
How Can I Achieve Good Credit Scores?
If you had a bankruptcy or medical emergency or other types of hardship in your life, consider a strategy to re-establish your credit. Nonconforming lending for credit cards is a fresh start to help you build your credit. Unsecured nonconforming credit cards are temporary, they are only recommended as short term to build or rebuild credit and not as a long term asset because of the interest rates and junk fees. If you are not qualified for a nonconforming credit card, your other option may be a secured MasterCard or Visa.
Likewise, if you are a business owner who does not have the credit criteria for a conforming business loan, a short term alternative business loan may help your business. An alternative business loan is a temporary short term adjustment, your exit strategy should consist of establishing your credit scores to 680 or better and refinancing into a new conforming business loan with a larger loan limit.
What Determines a FICO Score?
- 35% of your credit score is based upon your credit history
- 30% percent of your credit score is based on credit utilization (the amount you)
- 15% of your credit is made up of the length of your credit history
- 15% of your credit score is made up of the types of credit you use
- 10% of your credit score is determined by new credit
Your Credit Score Evaluation:
- 800-850 Credit Scores: Impeccable Credit
- 700-790 Credit Scores: Excellent Credit
- 650-690 Credit Scores: Good Credit
- 600-640 Credit Scores: Fair Credit
- Under 600 Credit Scores: Poor Credit
- VantageScore (version 4.0): 300–850
What About My VantageScore?
In 2006, VantageScore model was established jointly by the three credit bureaus, Transunion, Equifax and Experian. VantageScore model design allows a single model to operate on all three bureaus’ credit data, this means the calculated single score depends on your payment history, credit utilization, age of accounts, types of accounts and credit inquiries. The credit behavior is obtained from the three major credit bureaus to determine your single VantageScore.
- Bad credit: 300-599
- Poor credit: 600-649
- Fair credit: 650-699
- Good credit: 700-749
- Excellent credit: 750-850
VantageScore does not calculate unpaid or paid collections under $250.00. VantageScore is also more flexible with marginal credit history.
For more information on how we can best fix your credit scores, please fill out the online contact form about your concerns or give us a call at 855.477.9007. Read what people have to say about First Pro Capital on our Testimonials page.
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