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What is a Credit Score? A three-digit number given to

consumers that is calculated using information from your credit report.

Ranging from 300 to 850, the

higher the number, the better your credit score.

Everyone from lenders like New

American Funding, to utilities companies use credit scores to predict how likely you are to pay obligations on time.

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Why is your Credit Score Important to Mortgage Lenders

One little number can make or break your ability to secure a mortgage. This is because lenders are required to base the loan and interest rate they are

able to offer off of your credit score, and history. Your score offers insight into whether or not you will be a responsible borrower. In general, a high credit score means a low risk investment to companies, thus

they can offer a lower interest rate and conditions. A low credit score causes lenders to balance the perceived higher risk investment with a higher interest rate.

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Factors that make up your Credit Score Your credit score is made up of five separate factors: Payments History (35%)

• Whether you’ve paid past credit amounts on time. Debt/Amounts Owed (30%)

• How much you owe on your accounts and the amount of available credit you are using.

Length of Credit History (15%) • How long ago you opened accounts and how long it has been since you used them.

Types of Credit Used (10%) • The mix of account types you have, such as credit cards, retail accounts, installment

loans and mortgages. Inquiries (10%)

• How many of your accounts are new and have you had a lot of recent credit inquiries.

For more detailed information on how each factor is calculated, visit www.myfico.com

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Know Where you Stand We have all seen the often-cheesy television

commercials, but it really is that simple to check your credit report. A number of web sites and services are available ranging from completely free to a small monthly subscription.

There are 3 major credit bureaus, which calculate your

credit score, Equifax, Experian and Transunion. The FICO score from Equifax is used most often, but for it is always a good idea to check your score from all three reporting agencies to check for any discrepancies between them.

An excellent credit score is generally recognized as

being 720 or higher, while a poor credit score is less than 580.

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Credit Scores Aren’t Set in Stone Perhaps after checking, you realize your score is not what you hoped it would

be. This is okay. It is important to remember that credit scores change, and it’s never too late to work on improving your score.

Just a few points can mean the difference between a more or less favorable

mortgage, but improvement happens slowly so get started right away.

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Credit Rehabilitation Tips Credit rehabilitation begins by checking for errors. Mistakes happen. Let the

credit bureaus know immediately if you notice anything inaccurate. The next important step is paying off any debt, especially credit cards. Just be

sure not to close the credit cards once they are paid off, this will set you back even further in improving your score.

If you already have a couple of credit accounts, don’t apply for more since the

credit inquiries lower your overall score. Finally, continue making payments on time. Delinquencies stay on your record

for 7 years; so make sure that you are at least making the minimum payment each month.

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Free Credit Approval Once you have put the work in to monitor or rehabilitate your credit score, its

time to put it to work.

Becoming a Preferred Buyer with our Free Credit Approval proves to Realtors and sellers that you are a serious homebuyer, giving you an edge over unprepared buyers.

The upfront process also gives you the assurance you need to know how much you can afford and the type of mortgage that is best for you.

Plus, a Free Credit Approval is like virtual cash to homebuyers, giving you the

upper hand during negotiations.

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Mortgage Opportunities for Lower Credit Scores

If your credit score is still lower than the ideal, an FHA Home Loan may be the solution to helping you achieve your mortgage goals.

FHA Home Loans are federal government insured mortgage loans that allow lenders like New American Funding the flexibility to offer funding to people struggling to secure home financing.

With easier credit qualifying and smaller down payments, they can be a great solution for first time homebuyers or those with a history of credit problems.

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Check Your Credit Before Purchasing a Home

Learn More About Our Upfront Credit Approval and First-Time Homebuyer Programs

www.NewAmericanFunding.com

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