Mortgage Lender Ratings
What affects Credit Ratings / Score?
How they are calculated and what all activities affect them ?
Is the credit score same when different companies pull the report?
I want to shop for mortgage and before that I have taken pre approval from an online lender. I found that some of the sellers do not accept online approval and reject the offer. Now if I go to an another lender, he will pull out my report and number of inquiries will increase. Will this affect my score? Please help me understand how credit score goes up and down.
Credit scores are designed to measure the risk of default by taking into account various factors in a person’s financial history. Although the exact formulas for calculating credit scores are closely guarded secrets, the Fair Isaac Corporation has disclosed the following components and the approximate weighted contribution of each: [2]
35% — punctuality of payment in the past (only includes payments later than 30 days past due)
30% — the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
15% — length of credit history
10% — types of credit used (installment, revolving, consumer finance)
10% — recent search for credit and/or amount of credit obtained recently