Will Home Loan improve FICO Sc

Discussion in 'Credit Talk' started by Kevin, Feb 13, 2001.

  1. Kevin

    Kevin Guest

    Will Home Loan improve FICO Scores and odds of getting Prime...????
     
  2. sam

    sam Well-Known Member

    RE: Will Home Loan improve FIC

    Sure.

    Of course it will also seriously diminish your debt to income ratio!
     
  3. Momof3

    Momof3 Well-Known Member

    RE: Will Home Loan improve FIC

    Of course it will also seriously diminish your debt to income ratio!

    Correct me if I am wrong, but I thought mortgages were not included in debt/ratios when compiling scores????? I am aware of front/back ratios but didn't think this had an effect on the det/ratios involved in scoring??
     
  4. sam

    sam Well-Known Member

    RE: Will Home Loan improve FIC

    I could be wrong on that.
     
  5. Kevin

    Kevin Guest

    RE: Will Home Loan improve FIC

    Than why do all credit applications ask whether you Own or Rent...I thought they associated Home Ownership with financial stability.
     
  6. sam

    sam Well-Known Member

    RE: Will Home Loan improve FIC

    You get more fico points if you choose "OWN" :) of course. But what i think i was getting at was that you are also adding a new liability tradeline to your credit report, which will initially hurt your score (all new accounts do). Until you've established that account.

    Thats what i meant to say.
     
  7. Erik

    Erik Well-Known Member

    RE: Will Home Loan improve FIC

    I don't know what effect a home loan will have on your FICO score. Many people try to get the high FICO score for the purpose of getting a good rate on the home loan. I can't imagine buying a home in hopes of getting a better credit card.

    Anyway, I have heard that most home owners get flooded with credit card offers. Can any home owners confirm this?
     
  8. the other

    the other Well-Known Member

    RE: Will Home Loan improve FIC

    There are two different ratios you guys are referring to.

    The debt to income ratio is your monthly debt payments divided by your monthly income.
    Most lenders will not approve you for an additional debt if your debt to income ratio would exceed 36% (note that ratios used for mortgage qualifications are different).

    The balance to limit ratio is the sum of all your credit card balances divided by the sum of all your limits. This does have a major impact on you FICO score.
     
  9. Kevin

    Kevin Guest

    RE: Will Home Loan improve FIC

    Just wondered if the banks perceive things differently...after a Home Loan.
     
  10. on the go

    on the go Well-Known Member

    RE: Will Home Loan improve FIC

    Just obtained my home 6wks. ago was told by mortg. lender who was a neighbor that a home loan was a elixer for credit scores. That I was on my way once I had my loan show up postive for about 6 mo. and was told to refinance for better rate in 1 yr. and I have 5yr. old ch.7.
     
  11. Momof3

    Momof3 Well-Known Member

    RE: Will Home Loan improve FIC

    I am not a home owner yet, but soon:) But most of my friends that bought their first homes received tons of offers, some good and some down right ugly but offer did come none the less. It is funny to me though because taking on a mortgage is a big debt for most people and banks tempting people to get into more debt just scares me. But before they became home owners most had trouble getting prime cards. Funny when "JP" first told me it was easier to get a mortgage than a gas card I thought he was joking but I don't think that anymore.


    Mom
     
  12. John Shimm

    John Shimm Guest

    RE: Will Home Loan improve FIC

    Lenders know you have accrued interest (not the money kind) in a home, as well as equity.

    If you default on a credit card, it's must simpler to find you (you own a home with an active loan on your credit reports), and they can simply put a lien against your house.

    Those who rent can pack up and move in a matter of hours, with no trace of paperwork, change jobs and rent somewhere else - difficult to get $ out of someone if you don't know where they are.
     

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