When you apply for a mortgage, a credit report will be pulled to determine your credit score and your current debt.
There are three Credit Reporting Agencies. They do not share information between each other, nor do they grant or deny credit. They only report information as it is supplied to them by your creditors and gather information from public sources.
A "tri-merged" credit report will be ordered by your Loan Officer and explained to you. This information from all three Credit Reporting Agencies combined into one report. The information will include:
a. Identifying Information - including your current and past addresses and any aliases you are known by.
b. Employment Information - For whom and for what periods you were employed.
c. Your Credit Scores - A number based on a formula that grades your history
d. Credit Information - What accounts, for how long, current and high balances, payment record, and status for all your creditors.
e. Public Records - Any bankruptcies, tax liens, or judgments against you.
f. OFAC Compliance - Due to the Patriot Act, your information will be checked against the Federal Government list of potential terrorists.
Your credit report does not include any of the following information:
a. Your Race
b. Your Religion
c. Your Criminal Record
d. Your Income
Your Credit Grade
Your credit is graded by each of the Credit Reporting Agencies. These scores are often called FICO Scores for the Fair Isaac & Company, which statistically and objectively assesses your credit risk (the likelihood that you will repay the loan). The scores range from 400 (very high risk) to 900 (very low risk). Scores under 500 and over 800 are rare.
Credit scores only consider information contained in your credit report including: past delinquencies; derogatory payment behavior; current debt level; length of credit history; types of credit; and the number of credit inquiries.
Your credit score considers both the positive and negative information in your credit profile. Late payments lower your credit while a good track record of making payments will raise your score.
The various portions of your credit profile are given different weights in the formula. The exact formulas are secret, however, the general weights are believed to be:
a. 35% - Previous credit history
b. 30% - Current level of debt, or current balance to high credit balance
c. 15% - Length of credit
d. 15% - Type of credit
e. 5% - Number of credit inquiries in the past 90 days
Some loan programs have higher or lower credit requirements. Credit scores can generally be broken down as follows:
Mortgage Trust Group has mortgage programs that go to under a 500 FICO score. However, these loans require a higher down payment.
Contact your Loan Officer for more information.
Mortgage Trust Group, Inc.
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