Credit – Your Most Important Asset

By Jacquelyn Brinker, Branch Manager, Union National Mortgage Company

For the typical consumer, a home is the largest purchase they will ever make. Understandably, people feel their home is their greatest asset. In fact, your credit score is undoubtedly the most important asset each of us “owns.”

Life has a way of throwing each of us curves, and often potential homeowners come in with questions about their credit or about what they should do to improve their score.

Credit remediation is often a source of fear and trepidation, and for good reason. With the exception of recognizing that the best score “wins,” the average home shopper knows very little about the whole credit scoring process. The good news is there are ways to improve less-than-perfect credit scores and obtain a loan for the home you really want.

The first step in the process is making certain that you know what your score is. Congress recently amended the Fair Credit Reporting Act so that consumers may now receive one free credit report annually, which is available on-line. If you are concerned about the online process, most reputable lenders will generally provide you with a copy of your report.

It’s also important to know just what a good credit score is. Most A-Paper scores (the best rates available) generally begin around 680, although this number may differ slightly among lenders. Don’t despair if you come up shy, there is always room for improvement, and no one – no matter what or who they are – receives a “perfect’ score. Increasing your score just 5 points can save a significant amount of money. For example, if your score is 698 and you increase it to 703, then you could save yourself thousands of dollars over time as a result of this slight improvement. This could make a difference in your loan’s interest rate or to avoid an additional charge for a lower score. This is a practice that has occurred since the national “credit crisis” entered our lives last year.

While credit repair is necessary for some, it’s not the only way to increase your credit score. Even if you have stellar credit, you can still enhance your score. Next month we will discuss steps you can take to improve your score.

More information is available on topics such as: “The Five Factors of Credit Scoring - How Does a Low Credit Score Affect My Interest Rate?” , “How Does the Underwriter View My Score?”; “Dealing with Credit Challenges -What If I Have No Credit?”; “ Do’s and Don’ts During the Loan Process.” Send an e-mail to jbrinker@unmco.com, and I will send you information covering these topics, because “Your Home Loan Matters.”

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