STEP 3: Credit ReportsA Credit Profile refers to a consumer credit file which is made up of various consumer credit reporting agencies. It is a picture of how one manages financial obligations.
Credit scoring is a statistical method of assessing the credit risk of a borrower. The score takes into account: types of credit, number of credit lines, number of inquires, past delinquencies, derogatory payment behavior, current debt levels, and length of credit history. If you have had credit problems, be prepared to discuss them honestly with a mortgage professional who will assist you in writing your "Letter of Explanation." Knowledgeable mortgage professionals know there can be legitimate reasons for credit problems such as unemployment, illness, or other financial difficulties. If you've had problems that have been corrected (reestablishment of credit) and your payments have been on time for a year or more, your credit may be considered satisfactory. |