Understanding Credit Reports: Answers To 10 Of The Most “Confusing” Questions Regarding Credit Report “FICO Scores”

29 07 2011
  1. What’s the difference between a credit report and a credit score? Does a credit report include my FICO® Score?
    Your credit report doesn’t contain any scores. Credit reports and scores are very different kinds of information. Your credit report contains information about your credit history gathered by the credit bureau from your lenders, state and county courthouses, collection agencies, and similar sources. This information shows your pursuit, use and repayment of credit. A credit score helps lenders interpret the data on your credit report. FICO® Scores are credit scores between 300 and 850 that are calculated only from your credit history information found on the credit report. Each FICO Score predicts how likely you are, compared to other consumers, to become seriously late repaying creditors in the future. The higher your score, the more likely you are to repay your creditors as agreed. Lenders may use both your credit report and your credit score to make some credit decisions.
  2. When I apply for a line of credit or an extended line of credit, will it hurt my FICO® Score?
    Not necessarily. When you apply for credit, the lender often will check your FICO® Score or credit report before making a decision. When you later check your credit report yourself, you may see that credit inquiry listed. Whether an inquiry affects your FICO Score depends on several factors, such as the type of credit you applied for and the number of inquiries you already initiated within the past year. For example, your score will ignore mortgage, auto, and student loan inquiries made within the 30 days prior to scoring. So if you shop around for a loan and apply for one within 30 days, those lender inquiries won’t affect your score during that time. Mortgage, auto or student loan inquires that have been on your credit report longer than 30 days are treated by the FICO scoring formula as a single inquiry if they occurred within a focused period of time, such as 45 days.
  3. Are all credit scores FICO® Scores?
    No. “FICO” refers to a particular brand of credit score developed by the FICO company which pioneered credit scoring. Ninety of the top 100 U.S. lenders use FICO® Scores. Most consumer websites sell other brands of credit scores to consumers, but such scores are used by few lenders and in many cases aren’t sold to lenders at all. These scores can mislead consumers and may come with poor advice about their credit picture. Consumers can get the same FICO Scores that lenders use at www.myFICO.com.
  4. Does my credit score determine whether I get credit?
    Your score will likely play a big part in that decision, but lenders won’t all view your score the same way. That’s because lenders have different tolerances for risk. Some lenders will require a higher score than others do for the same basic credit product. Also, lenders often will consider other information in addition to your score as they make their decision. This can include information from your credit application (such as income, length of time on your job, own vs. rent), any prior credit experience you have had with that lender, and the value of the property (auto or real estate) you want to buy.
  5. Will seeing a credit counselor hurt my FICO® Score?
    No. The FICO® Score ignores any mention of credit counseling or debt management plans on your credit report. It also won’t hurt your FICO Score if your credit report includes one or more accounts described as being paid through a credit counseling agency or a debt counseling agency. However, if such an agency does not pay on time, your score will be affected. It’s always a good idea to send your payments to the agency a little early so the agency can get your payment to your creditors on time each month.
  6. What can I do to significantly improve my credit score in the next couple of days?
    There are no quick fixes when it comes to improving your credit standing. Getting a good FICO® Score is the result of maintaining responsible credit habits over time. The most important of these habits are:
    • Pay your bills on time
    • Keep any credit card balances low
    • Apply for new credit only when necessary
    You also should check your credit reports for accuracy. You can get your reports for free once each year from www.annualcreditreport.com.
  7. Does checking my own credit report or credit score hurt my FICO® Score?
    No. When you check your own FICO® Score or credit report, the resulting inquiry on your credit report is ignored by the FICO scoring formula and will never hurt your FICO Score.
  8. Has everyone’s credit score dropped because of the recession?
    Not at all. While it’s true that recent financial problems have resulted in lower FICO® Scores for many people, millions of others have managed their credit in ways that have increased their scores. They have paid their bills on time, lowered their credit card balances, and postponed their pursuit of new credit.
  9. Do FICO® Scores consider race, gender or income in their formula?
    FICO® Scores don’t consider any personal information from credit reports including your race, gender, nationality, address, income and marital status. As a result, lenders who use FICO Scores are better able to comply with the federal Equal Credit Opportunity Act by making lending decisions in a non-discriminatory and fair manner.
  10. Are the FICO® Scores sold to consumers by myFICO.com an approximation of the score lenders see?
    FICO® Scores sold by myFICO.com are precisely the same scores used in credit decisions by thousands of U.S. lenders and other businesses, large and small. Other websites may sell scores that imitate the FICO Score in look and feel, but they use different formulas, have different score ranges, and may mislead people into taking inappropriate actions with their credit. Genuine FICO Scores are always clearly labeled as such.

For more:  http://bankinganalyticsblog.fico.com/





A New Study By Pew Research Center Finds “Housing Bust” Has Reduced “Household Wealth” Of Black And Hispanic Americans More Than White Americans (Video)

27 07 2011

As the economy struggles to rebound, a new analysis of Census data shows a widening wealth gap among white, black and Hispanic Americans. Gwen Ifill discusses the results of a new study with the Pew Research Center’s Paul Taylor and Howard University’s Roderick Harrison.





Skip Schenker Of The “Renovation Lending Institute” Presented At The “2011 REO Expo” In Ft. Worth, TX

27 07 2011

Skip Schenker poses with Mr. Christopher Gardner, author of “The Pursuit of Happyness” and the subject of the successful movie starring Will Smith. Both Gardner and Schenker were presenters at the 2011 REO Expo, hosted by “HousingWire” magazine, held last month in Ft. Worth Texas. Nearly 2,000 Default Industry Professionals gathered for education, motivation and networking. Magic Johnson was also one of the guest speakers.





S&P/Case-Shiller Home Price Index Shows Slight Increase In May 2011 With 4.51% Lower Values In Past 12 Months

26 07 2011
The current Radar Logic 25 MSA Composite data reported on residential real estate transactions (condos, multi and single family homes) that settled as late as May 23 and averaged for the month. The data indicates that with increasing transactions in the spring has come increasing prices (the typical trend). The national index increased 1.14% since April but still remains 5.89% below the level seen in May 2010.
  • S&P/CaseShiller home price index for the month of May comes in at 139.87, vs. the economist estimate of 139.80 and compared to a revised reading of 138.46 for the month of April.
  • The index fell 0.05% on a month-over-month basis and 4.51% from the same month last year.

For more:  http://www.streetinsider.com/Economic+Data/May+S%26PCaseShiller+Home+Price+Index%3A+139.87%2C+Down+4.51%25+YoY/6659312.html





Residential Home Remodels Continue To Increase In 2011 With A 22% Increase Over 2010

25 07 2011
  • The Residential BuildFax Remodeling Index rose 22% year-over-year–and for the nineteenth straight month–in May to 124.3, the highest number in the index to date
  • Residential remodels in May were up month-over-month 14.6 points (13%) from the April value of 109.7, and up year-over-year 22.1 points from the May 2010 value of 102.2
  • All regions were up month-over-month, with the Northeast up 9.8 points (12%), the South up 7.3 points (7%), the Midwest up 16.3 points (18%), and the West up 8.7 points (7%)
  • “Through the first five months of 2011 we have seen impressive gains within the remodeling index and May has continued that trend with a record setting month,” said Joe Emison, Vice President of Research and Development at BuildFax
  • “Even with the continued struggles in the economy, the remodeling industry has been a bright spot, as consumers look to make upgrades to their current homes, rather than purchasing a new residence
  • Based on the trends from the first months of this year, we expect to continue seeing strong gains from coast to coast.”
  • The BuildFax Remodeling Index is based on construction permits filed with local building departments across the country
  • The index tracks the number of properties permitted
  • The national and regional indexes all have an initial value of 100 set in April of 2004, are based on a three-month moving average, and are not seasonally adjusted

For more: http://www.buildfax.com/public/remodeling/index.html





Fannie Mae “June 2011 Monthly National Housing Survey” Cites Slow Absorbtion Of “Excess Supply Of Housing” As Limiting Housing Recovery And Economic Recovery

22 07 2011





30-Year Fixed Mortgage Rates Hold Steady At 4.52% As Weak Consumer Confidence Dampens Economic Growth Prospects

21 07 2011

 

 

  • 30-year fixed-rate mortgage (FRM) averaged 4.52 percent with an average 0.7 point for the week ending July 21, 2011, up from last week when it averaged 4.51 percent
  • 15-year FRM this week averaged 3.66 percent with an average 0.7 point, up from last week when it averaged 3.65 percent
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.27% this week, with an average 0.5 point, down from3.29 percent
  • 1-year Treasury-indexed ARM averaged 2.97 percent this week with an average 0.5 point, up from last week when it averaged 2.95 percent

 Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

  • “Mortgage rates were virtually unchanged this week amid mixed economic data reports. Although both the overall producer price index and consumer price index fell moderately in June on lower energy costs, the core price indexes inched up. In addition, consumer sentiment sank to the lowest reading since March 2009, based on figures from the University of Michigan.
  • “The recent housing data also varied. For example, single-family housing starts jumped 9.4 percent in June to the strongest pace since November 2010 and homebuilder confidence rebounded in July. Yet, existing home sales fell 0.8 percent in June and represented the fewest since November 2010.”

For more:  http://freddiemac.mediaroom.com/index.php?s=12329&item=48469