Fha Home Loans And Dmps
FHA mortgage guidelines do mention consumer credit counseling payment plans, and its OK to be in one and get a home loan if:
- You are at least 12 months into the plan
- Youve made all required payments in full and on time
- You have written permission from the counseling agency
This is nearly identical to the FHAs stance on Chapter 13 bankruptcies, which are actually court-ordered debt management plans.
What Goes Into Your Credit Score
Lenders and other financial institutions report your credit activity to the credit bureaus and this record, in turn, forms your credit report.
The things they look at to determine your score can be found in your and include your:
1. Payment history : Do you pay your bills on time? If you miss payments or send them in late, it negatively impacts your credit score. Your payment history carries a weighting of around 35% when computing your score.
2. Credit utilization rate : This refers to the amount of credit you use out of your total available credit. For example, if you carry a balance of $5,000 on all your credit cards and your total credit limit is $10,000, your credit utilization ratio is 50%.
A high credit utilization ratio does not reflect well on your credit profile and experts suggest you keep it lower than 30%.
3. Length of credit history : Your credit age refers to how long you have been using credit. The longer your history and the evidence to show that you have been responsible with credit, the higher your score in this area.
This is why it is advisable for you to keep some older credit files open even if you no longer need them.
4. Types of credit : The types of credit on your credit file impacts your score. A mix of different kinds of loans, credit cards, lines of credit, etc. shows potential lenders that you are familiar with how various financing options work.
Checking your own credit score is seen as a soft inquiry, and does not impact your credit score.
How To Improve Your 812 Credit Score
A FICO® Score of 812 is well above the average credit score of 711. It’s nearly as good as credit scores can get, but you still may be able to improve it a bit.
More importantly, your score is on the low end of the Exceptional range and fairly close to the Very Good credit score range . A Very Good score is hardly cause for alarm, but staying in the Exceptional range can mean better chances of approval on the very best credit offers.
Among consumers with FICO® credit scores of 812, the average utilization rate is 11.5%.
The best way to determine how to improve your credit score is to check your FICO® Score. Along with your score, you’ll receive a report that uses specific information in your credit report that indicates why your score isn’t even higher.
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How To Improve Your 715 Credit Score
A FICO® Score of 715 provides access to a broad array of loans and credit card products, but increasing your score can increase your odds of approval for an even greater number, at more affordable lending terms.
Additionally, because a 715 FICO® Score is on the lower end of the Good range, you’ll probably want to manage your score carefully to prevent dropping into the more restrictive Fair credit score range .
46% of consumers have FICO® Scores lower than 715.
The best way to determine how to improve your credit score is to check your FICO® Score. Along with your score, you’ll receive information about ways you can boost your score, based on specific information in your credit file. You’ll find some good general score-improvement tips here.
Breakdown Of A Credit Score Rating
So far, this article has only discussed two of the credit score groups which you could move into Good credit score group and Excellent credit score group but there are a range of others that you could fall into if you do not manage your debts very well. These are fair, poor and bad.
A fair credit score would fall into the 650 699 range, if you fall into this bracket it means that you have likely missed a small number of payments on a debt. In general, around 15% of people fall into this category. A poor score means that you have missed several payments over an extended period or have missed a payment on multiple occasions. In can also mean you have a lot of debt at present and would be unlikely to be able to repay any further loans, about 20% of people have this rating.
At the bottom of the scale is a bad score, here you are likely to have had a legal judgment registered against you or in a worst-case scenario been declared bankrupt at some point. The main factor driving you credit score is how well you have managed to make repayments and as shown above these drive your credit rating which is especially true in this case. If you are in this bracket you are in the 8% of the borrowing population.
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What Factors Affect Your Credit Score
Your credit score is comprised of five factors: payment history, amounts owed, length of credit history, new credit, and credit mix.
If your FICO Score is 700 to 749, youre probably perfect or near-perfect in the payment history category. At worst, you may have one or two 30-day late payments in your distant past, but nothing recent.
In this credit score range, is likely to be a bigger factor. Its the amount you owe on your credit cards, divided by your total credit card limits.
For example, if you owe $5,000 in credit card debt, and you have $20,000 in credit card limits, your credit utilization ratio was 25%. Any number below 30% is considered good.
What Does Not Count Towards Your 712 Credit Score
There are many things that people assume go into their 712 credit scores but that actually dont. Examples include how much money you earn, your age, your marital status, your child support payments , how much money you have donated to charity, where you work or live, or your employment history.
None of these things or anything like them do anything at all to your credit score, so instead, focus on the five primary factors that we outlined and discussed above.
Now that you know what counts towards your overall credit score and what does not, you should know exactly what you need to pinpoint in order to enhance your score. For example, maybe one reason your credit score is low is because youve opened several new accounts of credit.
Regardless, its important at this stage for you to positively identify what it exactly is that is lowering your credit rating. Once you have identified what that is, you can start to formulate a plan.
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Learn More About Your Credit Score
A 712 FICO® Score is Good, but by raising your score into the Very Good range, you could qualify for lower interest rates and better borrowing terms. A great way to get started is to get your free credit report from Experian and check your credit score to find out the specific factors that impact your score the most. Read more about score ranges and what a good credit score is.
How To Fix A 712 Credit Score
In summary your credit score determines your ability to borrow. Its important that you manage it. If you have 712 credit score then your focus should be on driving it higher. To do this follow these simple tips:
- Pay down your debt If you have debts but also have savings then you need to ask yourself do you need all that cash in the short term? Could it be used better if it was spent on paying down debt? This would be an excellent use of your funds in a low interest rate environment and would have the beneficial affect of moving your 712 credit score even higher.
- Get a credit report Like everything else in life mistakes can happen in any area and that includes the record of your debt repayments. Its possible to get a credit report to see if all the information that lenders have on you is correct. If it is not and there are records which indicate that you missed a payment which you never missed, or you applied for finance at an institution you have never even heard of then you need to correct that. Correcting those errors will also drive that score towards excellent.
- Avoid short term debt Before you take on short term debt do a simple mental exercise. Consider an item you wish to buy, look at the price, now ask yourself what the real price is if you use short term finance given the high interest rates that can apply. In some cases, this can mean that the item will cost you twice as much as the list price. At that price is it still something that you wish to buy?
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So Can I Lease A Car With A 712 Credit Score
There are two kind of leasing deals namely the normal deal and the promotional deal. A promotional car lease deal is one offered via auto makers and their merchants temporal period . The arrangements are vigorously promoted and can be seen on car organization sites.
As a rule, these extraordinary arrangements depend on lessened costs, and helped lease-end residual value. Besides, there might be mileage confinements and up-front installment to be required. When you will try to lease a car with 712 credit score, keep in mind that only people with good or excellent score point are entitled to this promotion the reason being that most car companies go on loss because some people do not fulfill the lease agreement most of the time.
What Does A 700 Credit Score Get You
What a 700 credit score can get you. Your credit score is used by lenders to see if you qualify for financial products and to set the interest rate you’ll pay. With a 700 credit score, you’ve crossed over into the “good” credit range, where you can get cheaper rates on financial products like loans and credit cards.
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Know What Information You Need To Look At
You also need to know what information you should look at when looking at credit cards. When you are offered a credit card, you will be given a variety of information, such as the APR . Sometimes the credit card offer will offer a variety of rates, and you wont know what rate you will get until after you have been approved. You would be foolish to assume that you will get the lowest rate possible.
Another piece of information to look at is the credit limit. Your potential creditor will tell you that your card is limited up to a certain point, but again, you may not qualified for the maximum limit. When you do max out a credit card that has a low credit limit, it can harm your credit score.
Some credit card companies will also have a penalty APR. Always find out what the penalty rate is before applying for a card, what causes you to have the penalty, and how long the penalty will last.
Finally, look at any fees that come with the credit card. Examples of fees include late payment fees, cash advance fees, annual fees, and transfer fees. Again, dont apply for a credit card until after you have found out exactly what these rates are.
Add Rent And Utility Payments To Your Credit Report
The good news is there are legitimate free and low-cost ways to improve your credit scoreno magic tricks required.
Experian offers a free service, Experian Boost, that allows consumers to add to their credit history payments not traditionally reported to credit reporting agencies, including bills for cell phones, utilities and streaming services.
They give us permission to access their checking, savings or credit card accounts for those payments and we add those payments to their credit reports, Experians Griffin says. That is one of the most empowering things weve seen for peopleit places the choice in their hands.
People with scores of less than 680 are increasing their credit scores an average of 19 points, Griffin said. In general, consumers see an average increase of 13 points, he says.
Experians data has shown that adding these payments does not skew credit scores inaccurately, but instead helps lenders identify new customers who are actually good credit risks, Griffin says.
Similar programs include
- eCredable Lift, which reports your phone and utility payments to credit reporting agency TransUnion for $25 a year
- Experian RentBureau, which allows consumers to add on-time rent payments to their credit history
- A free app called Altro , which reports payments for streaming services
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Credit Score: What Does It Mean
A 712 credit score is considered to be good. You can expect to get low rates on credit cards and loans. Lenders see consumers with scores in the good range as being “acceptable” borrowers and may offer them a variety of credit products.
Lets get started to understand what it means, what you can get with a 712 credit score and how to improve it.
21% of U.S. consumers have credit scores that are considered to be in the “Good” range.
Shopping For Credit Cards With A 712 Credit Score
When shopping for credit cards, make sure you explore all of your options. In other words, dont just sit down with one potential creditor and decide to accept their deal or not. Sit down with multiple potential creditors and compare and contrast them to find out what works best for you.
If you already have a credit card, but have been shopping for one that is cheaper, you can then go to your existing creditor and request them to either match or beat an offer from another credit card company. Tell them that you believe you are paying too much money in fees and interest, and ask them if they are willing to lower their rates and fees down to the other credit card company that you are thinking about switching to.
If they refuse, then you can switch accounts, but dont close your existing account immediately. You still want to make the minimum payment on. it while you are waiting for your balance to transfer to your new account. You only want to close a credit account when your balance is at zero.
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Why Your Credit Score Matters
There are real benefits to staying on top of your credit score.
Thats because a strong credit score can translate into real perks, like access to a wider range of products and services including loans, credit cards and mortgages. You could also enjoy better interest rates and more generous credit limits. Meanwhile, if your credit score isnt quite where you want it to be, knowing the score is the first step to improving it.
Either way, it pays to know your credit score. Its your financial footprint the way companies decide how financially reliable you are. A higher credit score means lenders see you as lower risk.
The Average Credit Score By Age State And Year
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- The average American has a credit score of 714, according to data from Experian. That’s considered ‘good’ by FICO’s score ranges.
- People over 50 have average credit scores higher than the national average. Scores in some states, including Minnesota, Wisconsin, and Vermont, tend to exceed the US average, too.
The average credit score in the US is 714, according to credit reporting company Experian, calculated using the FICO scoring model.
Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850. The higher your score, the better people with higher credit scores tend to get better interest rates on loans, have access to and lower interest rates, and could even pay less for insurance.
The FICO model of credit scoring puts credit scores into five categories:
- Very poor: 300-579
- Very good: 740-799
- Exceptional: 800-850
Based on this scoring system, the average American has a good credit score. But, the average credit score is different by demographic.
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What’s A Good Credit Score To Have How To Get It
Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more. Citi is an advertising partner.
A good typically ranges between 680 and 750. Consumers who fall within this spectrum tend to qualify for excellent interest rates, and loans. However, what constitutes a good credit score is far more nuanced. In reality, the range of scores will depend on both the exact credit scoring model being used and its purpose.