Colorado Credit Score Information

A credit score is the number that indicates the likelihood a borrower is to repay their future debts. A good credit score increases the opportunity to receive a Colorado home loan and speeds up the mortgage approval process if it is learned that they are low-risk borrowers.

The FICO score is the most common credit score used by lenders range from 300-850. The higher the credit score, the better the credit. Your credit score is generated using a mathematical formula that was developed by Fair, Isaac Corp. This credit score determines how much money and on what terms a lender will offer. The scoring is universal and is completely based on given information, not personal opinion. You have three FICO scores, one from each of the 3 credit reporting agencies-Experian, TransUnion and Equifax. Depending on the private reporting company you choose, they collect information about the consumer, run it through its FICO credit scoring model and generate an individual consumer credit report.

To learn more about how the home buying process works, go to the 'How Do I?' tab under the Help Center section.

To create a FICO credit score, each credit report must contain at least 1 account that has been open for a minimum of 6 months or an account that has been updated in the past 6 months. This ensures an accurate FICO credit score because it was generated using adequate and recent information.

You are legally entitled to receive 1 free credit report from each of the 3 main national credit score reporting agencies each year. You may also order additional credit reports from these companies at a small fee. You can obtain them immediately by visiting http://annualcreditreport.com and inserting the needed information. Each credit score report will require the following information to generate a score:

• Identification Information (name, address, social security number, etc.)
• Debt and payment history on credit cards, student loans, consumer loans, car loans, home loans, etc.
• Previous Collections
• Tax liens, judgments and bankruptcies
• Inquiries for new credit

This is how the given information in your report ranks in your credit score:

• Payment History - 35%
• Amounts Owed - 30%
• Length of Credit History - 15%
• New Credit - 10%
• Types of Credit Used - 10%

Income, race, religion, gender, marital status, nationality, age and receipt of public assistance do not play a factor in determining credit scores.

When people talk about your credit score, they are generally talking about your current FICO credit score. However, some Colorado home loan lenders create their own credit scores from a custom credit developer. So, there is no universal score used to make decisions from all borrowers.

Often, credit scores are not the only items used to determine whether or not you will receive a loan. Some lenders may also include other information about you, as well as the FICO credit score. Although the FICO credit score is the most common, especially in mortgage lending, there are other scoring models used.

Your FICO credit score may differ at each of the credit reporting agencies. If this is the case, it is probably because the information those agencies have about you differs. You should check your credit score at each of the three main agencies once a year. If the reports show any inaccuracies, you should contact the credit agency that made the report. The agency is then required under the Fair Credit Reporting Act (FCRA) to investigate the dispute within 30 days.

BEFORE YOU APPLY

Before you apply for a Colorado home loan, prepare a copy of the 3 credit reports with your credit score and make sure that they are accurate before you submit your application for a Colorado home loan. If you have had past credit score problems, be prepared to discuss them honestly. Lenders to receive a Colorado home loan understand that there are often unavoidable reasons for credit problems, such as unemployment, sickness, or other financial setbacks. If these past problems have been worked out or you have discussed with your creditors how to correct it and you have paid your payments on time for over a year, there will likely not be a problem obtaining a Colorado home loan. A lender may ask you to pay off an account to improve your debt ration which usually takes 30 days for the new information to show up on the credit report.

View more content at Colorado Home Loan.org to help you learn, how to obtain and keep a good credit score with credit card information, Colorado credit counseling services information, Colorado foreclosure information and Colorado bankruptcy information.

Also, check out our Special Programs page that shows loans programs for everything from first-time home buyers and veterans to teachers!

Fill Out An Online Application

Take the first step and fill out the online application. Once contacted, we will let you know within a day if you are approved for your loan amount and will close within 10 days.

30 Year Home Saver

Our 30-Year Home Saver Loan provides security and saves you money. In fact, few mortgage companies are AUTHORIZED by the Federal Housing Authority to sell these products.