|
Determine What Your Credit
|
Due to the current economic crisis along with the freezing of credit, it may be difficult to obtain a car loan, mortgage, or college loan today. FICO scores, which range from 300 to 900, are a necessary component in obtaining loans.
Before this financial crisis, individuals who had a FICO score of 625 or higher would easily be granted a loan. Since the economic meltdown, however, in order to obtain any loan you will have to have a FICO score of 750 or higher. What is the reason? Quite simply, the banks cannot lend money because they are weighed down with the bad mortgage debt that occurred during the sub-prime mortgage debacle. Thus, they are short on liquidity – that is – they do not have enough cash to lend to other banks during this crucial time in our history.
Thus, if you are considering buying your ideal place to retire, your FICO score will have to be much higher than it previously was in order to qualify. This also holds true whether you are buying or leasing a car. Having a High Score is the basis by which the interest you pay on any loan is determined. Therefore, the higher the FICO score, the better chance your interest rate will be lower.
It should be noted, however, that the three credit reporting agencies do not operate in the same fashion. This means they have their own set of criteria that helps them assess your credit and whether or not you are a good or bad risk. Each agency states their reasons for the FICO score you are assigned. The only problem is that none of them delineate how they arrived at their conclusions.
During these difficult times, it may behoove you to check your credit score and credit report to determine if everything listed is factual and correct. In addition, try to pay down your debt doubling payments each month; rip off new applications received in the mail, and keep one card on hand for emergencies while you pay down the other high-interest rate cards.
While many of you are worried about the current economic crisis, you may not have too much concern for your FICO score at the present time. However, it is important to know where you stand according to the three aforementioned agencies so that you can make knowledgeable decisions now and in the future. You may request your free Annual Credit Report Online. It can be viewed immediately upon authentication of identity.
