Credit Reports in Royal Oak, MI
Types of Credit Scores
Each credit reporting agency calculates your
score and each score may be different because
the credit history each agency has about you
may be different. Lenders may make a credit
card or auto loan decision based on a single
agency’s score, although others, such as
mortgage lenders often will look at all three
scores.
Your credit score changes when your
information changes at that credit reporting
agency. This means you can improve a poor
score over time by improving how you handle <
credit Many insurance companies use
something similar when setting your insurance
rates, called a “credit-based insurance score”.
You may be able to improve your insurance
score by improving how you handle credit,
which in turn may lower your premium payments
on auto or homeowners insurance.
Some credit scores offered to consumers are
just estimates and are different from the credit
risk scores used by lenders. Consumer
reporting agencies and other companies
sometimes use an estimated score to illustrate
a consumer’s general level of credit risk.
Your Score is usually developed by the Fair
Isaac Corporation and is the most common
system used today.
FICO scores range from 350-850 with most
people’s score in the 600s and 700s.
Higher FICO scores are better.
What is credit?
If you have ever taken out a loan to buy something—a car, for example—you were given credit.
Credit means you are using someone else’s money to pay for things. It also means you are
making a promise to repay the money (the loan) to the person or company that loaned you the
money (the creditor or lender). A loan usually includes both principal (the amount of money
you borrowed) and interest (the additional dollars you pay for the privilege of borrowing the
money). Because a loan is a legal obligation, it is important to understand how you must repay it.
Good credit means that you make your loan payments on time and you repay your debts as
promised. Good credit is important because it makes it more likely that you can get a
new loan in the future when you want to make a major good credit
record, lenders feel more confident that you will be willing and
able to pay back the new loan.
It’s true that you need good credit to buy a home, but you don’t
need perfect credit. If you don’t have good credit right now, don’t
get discouraged. You can use the ideas in this guide to start
improving your credit.
It may take some time, but you will be far better off if you
improve your credit before you apply for a home mortgage loan
or other large purchase. This is important because if you have a
habit of not paying your bills on time, or have a lot of debt, you
may not qualify for a mortgage loan. Or the lender may give
you a loan, but with a larger down payment requirement or at a
higher rate of interest. If you pay a higher rate, you could end
up paying thousands of dollars more in interest for your home.
For example, an $80,000, 30-year fixed-rate
mortgage at 7 percent interest will have a
monthly payment of approximately $532,
compared with a monthly payment of $644
for the same $80,000 mortgage at 9 percent
interest. Over the life of the loan, you will
pay close to $40,000 more for the 9 percent
loan than you would for the 7 percent loan.
As you can see, it may be wise to take care of
any credit problems you have before you
start looking for a home so you can apply
for the best interest rate possible.
How do I know if I have good credit?
Sometimes people think they have good credit. Then they
apply for a loan and are surprised to learn that there are
some problems with their credit. The best way to find out if
you have good credit is to get a copy of your credit report.
What is a credit report?
A credit report is a record of how you have paid your credit
card debt and other loans. A credit report shows how much
debt you have, if you have made payments on time, or if
you have not paid back some loans at all. Credit reports do not
show information about your race, religion, medical history,
personal lifestyle, political preferences, criminal record or any
other information unrelated to credit.
Credit reports are compiled by national credit-reporting agencies.
The typical credit report includes four types of information:
1. Identifying information: your name, current and previous
addresses, telephone number, Social Security number, date
of birth, and current and previous employers. This information
comes from your credit applications.
2. Credit information: specific details about your credit cards,
student loans, and other loans. This information includes the
date opened, credit limit or loan amount, balance, and monthly
payment. The report also shows your payment history during<
the past several years, and the names of anyone else responsible
for paying the account, such as a spouse or a co-signer. Late
payments, skipped payments, accounts turned over to a collection
agency, and repossessions appear here. This information
comes from companies you do business with.
3. Public record information: bankruptcy records,
foreclosures, tax liens for unpaid taxes, monetary court
judgments (such as lawsuits), and, in some states, overdue
child support. This information comes from public records.
4. Inquiries: the names of those who obtained a copy of your
credit report and how often you have applied for credit in the
past two years. When you order a credit report, you may
also see the names of companies that have reviewed your
report for “pre-approved” credit offers. However, these names
will not be given to creditors who request a copy of your
report. Creditors only see the inquiries you initiate (by
applying for a new credit card, for example).
Creditors rely on this information about how you’ve handled your
loans in the past to decide how likely you are to repay a new loan.
When you apply for credit or a loan, you give the creditor permission
to order your credit report from a credit-reporting agency.
How to order a credit report.
The best way to know what your credit report shows is to order
one and review it carefully. It’s a good idea to order your credit
report once a year to make sure there are no errors on it.
You can order your credit report from any of the major creditreporting
agencies listed to the right. When you order your
report, have ready your Social Security number, date of birth,
current and previous
addresses for the past five
years, and maiden name,
if applicable.
You may have to pay a small
fee (about $8) to get your
credit report. Or your state
may have a law that
requires credit-reporting
agencies to provide you
with one or two free reports
every year. Credit reports are also free after you have been
turned down for credit. However, you must ask the agency that
produced the credit report for a copy of it within a specified
period of time, usually 60 days.
The information on your credit report may vary from one creditreporting
agency to another. This is because not all creditors
report their information to every credit-reporting agency. For
this reason, you may want to order a report from each of the three
credit-reporting agencies listed on the previous page.
How to understand your credit report.
Several types of organizations are available to help you
understand your credit report at little or no charge. For
example, you can ask for help from the credit-reporting
agency that sent you the report, or you can visit a nonprofit
credit-counseling organization. You can also get help from
lending institutions, credit unions, or local housing assistance
agencies in your city or county.
The example on page 9 shows how a credit report might
look, but keep in mind that not all credit reports are the
same. Shown are three different credit files listing the
same account.
How to correct errors.
Credit reports should be accurate, but it is important to make
sure. If there are errors or outdated information on your credit
report, it could hurt your chances of getting a new loan.
The Royal Oak housing market is in demand right now. Many factors are responsible for the growth of this community; the location, being conveniently located to 1-75 and 696 makes commute time quicker and resale an attractive option to home buyers. The lack of new homes in the area will continue to allow Royal Oak to appreciate. Many communities in southeast Michigan have seen new home construction kill existing home values. And finally the area offers many things to do mainly for the younger adult population. The nightlife, dining and feel of a midtown locale offers endless entertainment and excitement..
Let Us Help You Find Your Next Home
The Royal Oak housing market is in demand right now. Many factors are responsible for the growth of this community; the location, being conveniently located to 1-75 and 696 makes commute time quicker and resale an attractive option to home buyers. The lack of new homes in the area will continue to allow Royal Oak to appreciate. Many communities in southeast Michigan have seen new home construction kill existing home values. And finally the area offers many things to do mainly for the younger adult population. The nightlife, dining and feel of a midtown locale offers endless entertainment and excitement
Reduce Home Buying Stress
Buying a home is stressful for many couples. Not only are they making decisions that will affect their lives for years to come, they are also being asked to make them under less-than-perfect circumstances - like an uncertain housing market.
Psychologist Linda Sapadin offers three stress minimizers to homebuying couples:
Don't turn on each other. "Recognize that this is a stressful process, and if you blame the other person, then what you usually get is counter-blame," she says. "So it's much better to put the blame on the process."
Don't expect perfection. "You want to assume that things are not going to go perfectly, that there's going to be some unexpected difficulties, expenses, problems to solve," Sapadin says, "so just know that up-front."
Speak to supporters before you speak to your critics. "There could be one relative who says, 'What?! You're spending that much money?' or 'You're moving there?' Don't tell that person until you and your partner are united," Sapadin says. "If there's some part of you that is uncertain, you don't want to undermine that uncertainty by speaking to your critics."
