2. Your Credit Report; What is it?
A Credit Report is a record of where
you work and live, how you pay your
bills, and whether you have been
sued, arrested, or have filed for
bankruptcy.
3. The Many Uses for a Credit Report
•Employers use your credit when hiring applicant’s.
•Insurance companies look at your credit to see if you are a good risk.
•Bank’s pull your credit report to determine if you will pay back your loan.
•Credit Card Companies use them to extend credit.
•Landlords Pull your credit report to judge your character as a potential tenant.
•Businesses can only use it for Valid Reasons
•Good Credit score; Over 700. The range is 500-900
4. Your Financial Resume’ Establishing Good Credit
Pay you debts on time
Open a checking and savings account at a bank
Apply for a secured credit card- (this requires collateral)
Open a retail store credit card or a gas card.
A collateral loan- Using your own money and paying yourself back. Ask if
it is reported to the credit bureaus. Some banks do not report these.
Apply for a co-signed loan with someone that has good credit.
5. HowYourCreditReportIs Scoreaccordingto FairIsaac.
•35% is your payment history on credit cards, installment loans, or mortgage loans. Any public
record items, such as judgments or bankruptcy, and collection items
•30% is your outstanding debt. Amount owed on all accounts and on different types of
accounts, such as credit cards or installment loans. How many accounts have balances. How
close are you to each credit limit.
•15% is your credit history. How long have you been building a credit history,how long specific
accounts have been established and how long since you used each account.
•10%is your pursuit of new credit. How many inquiries and new accounts does your report
show, and how recent are they. How long has it been since the most recent inquiry. Have you
have made on-time payments to re-build your credit after a period of frequent late
payments.
•10%is the types of credit in use. How many accounts are reported for bank cards, travel and
entertainment cards, department store cards, installment loans, and so on.
6. The Five C’s of Credit; What lender’s look for.
1. Character- The likelihood that you will pay back the loan.
2. Capacity- How will you repay this loan.
3. Capital- The amount you are investing.
4. Conditions- The intended purpose for the loan.
5. Collateral- The value of the property.
7. The Real Estate Agents. They work for you
•Make sure you like the Real Estate Agent.
•Make sure there are a member of the Realtor Association.
•If they ask you to sign to work exclusively with them, they are asking for your commitment.
They have to make money and your just wasting their time if your not serious. If you don’t,
you have just dropped down on their priority list.
•If they ask you to sign a Dual Agent disclosure it means they are working with the buyer and
the seller. Since the seller pays them with commission, they are their first priority.
•The Real Estate agents knows all the ins and outs so you would be foolish to buy a house
without one.
•They will work hard for you.
8. Going to the Bank; Steps to getting a mortgage.
•The Preapproval; Most Banks do not pull your credit any more. Debt to Income Only.
•The Application; This is the official start of your relationship with the bank.
•The Offer to Purchase; This holds the house usually so no one else can buy it usually.
•The Credit Report; This is the moment of truth
•The Documents Needed; Things even your mother doesn’t know
•The Purchase and Sale agreement; You better be sure. It is legally binding, to a point.
•The Appraisal; Another Moment of Truth
•The Closing; Exercise you writing hand
