A credit score carries a ton of weight when applying for a home loan, and while VantageScore, a company created by credit bureaus Experian, TransUnion and Equifax, is modifying the way credit scores will be calculated, mortgage applications will still require a FICO rating when applying for a loan.
FICO, named after the Fair Isaacs Corporation, which created the software to calculate credit scores, is still required to determine home loan eligibility because of government-owned mortgage companies Fannie Mae and Freddie Mac because of their influence on the market.
However, when applying for other forms of credit, take note that substantial changes are underway. A few changes include:
- Closing credit card accounts may now reflect against you
- How the portion of available credit being used is weighed versus the maximum limit
- Excessively large credit card limits will be marked negatively
- Civil judgements, medical debts and tax liens will be taken out of the equation
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Categorized in: Credit, Uncategorized