Credit Scores and Credit Tips

Freddie Mac has given us an indication of low vs. high scores on their Gold Measure Worksheet. The following scale assesses Risk Units (RUs) for a borrower:

  • Borrowers with a score above 760 are in the “high” range. The score is positively compensating.
  • Borrowers with a score between 680 and 760 are in the “mid” range. The score does not add anything to the files, but does not detract.
  • Scores from 680 to 620 are low but can be acceptable. Approvals must be justified carefully and files documented thoroughly.
  • Scores below 620 are very “low” and may not be acceptable for conventional financing.
  • A score below 600 is probably prohibitive

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years.

  • There are certain exceptions:
  • Bankruptcy information may be reported for 10 years.
  • Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
  • Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.
  • Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.
  • Adding Accounts to Your File

Your credit file may not reflect all your credit accounts. Although most national department stores and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to CRAs: Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those creditors that don’t. If you’ve been told you were denied credit because of an ”insufficient credit file” or ”no credit file” and you have accounts with creditors that don’t appear in your credit file, ask the CRA to add this information to future reports. Although they are not required to do so, many CRAs will add verifiable accounts for a fee. You should, however, understand that if these creditors do not report to the CRA on a regular basis, these added items would not be updated in your file.