FICO credit scoring is statistically extending credit to borrowers utilizing a complex mathematical software program devised by Fair, Isaac and Company.  Your FICO score greatly determines your cost of money. The number, which is a summary of your credit history, is designed to tell credit providers the likelihood that a consumer will repay a debt and on time.  Nearly all lenders for home loans, auto loans and credit cards, now use this FICO score.

The Prime level ("A" paper) creditworthy borrower has a FICO score, depending on lender, of 680 or greater.  There is also an A- level paper, also depending on lender’s policy, between 620 and 680.  Sub-prime paper is less than FICO score of 620.  This again is spilt into B paper (580- 620), C paper (520- 580) and Hard Money…Don’t ask.

Many lenders use the FICO score to reward individuals that have starved to maintain credit worthiness, by providing lender loan discount points as indicated below.  Each point equals 1% of the loan amount.  The points listed are either added to or subtracted from the lenders posted loan rate.

 

FICO Score Loan Discount Points

720 or greater -0.125

680 to 720 0.000

620 to 680 +0.125

580 to 620 +0.500

520 to 580 +2.000

For borrowers that have less than Prime level credit then we provide Sub-Prime Loan Programs, but first you should honestly review your credit report and obtain credit history.  If your credit report indicated credit problems, be prepared to discuss them with our loan consultant.  IF you feel there are reporting errors, then continue to the next section How to Correct Reporting Errors and continue to section on Credit Reporting Repositories.