Explaining Your Credit Scores

Your Credits Effect On Manufactured Home Loans

Credit score

A credit score is a numerical expression, based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the likelihood that the person will pay his or her debts. A credit score is primarily based on credit report information, typically sourced from credit bureaus / credit reference agencies.

Lenders, such as LoanJunction.com banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a trusted system.

Improve your credit score
	February 15, 2008: 4:14 p.m. If you want the best loan, make sure your score is the best it can be. By Staff Writer Jeanne Sahadi
NEW YORK (CNN/Money) - You may be out of school, but that doesn't mean you're free from report cards. In fact, if you want to buy a house, a car or any other big-ticket item, a lender will look up your "grade" as soon as you come knocking. That grade is your credit score. Generally speaking, a credit score measures the likelihood you'll repay what you owe, and it is based on information in your credit report. The rewards of raising your score speak directly to your wallet: You'll qualify for more loans and be offered better interest rates. There are many varieties of credit scores available to lenders. But the most widely used for large loans are FICO scores, which are based on a scoring system developed by Fair, Isaac & Co., and which are provided to lenders by the three national credit bureaus - Equifax, Experian and TransUnion. Consumers may now get their FICO score or a comparable version of it from each of the bureaus. It pays to review these scores at least three to six months before shopping for a loan so you'll have time to improve your standing before approaching a lender. Following are five things you can do to boost your creditworthiness, plus more information on obtaining your personal score. 5 steps to better credit Correct blatant mistakes. Your credit score is only as good as what shows up in your credit report. Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan. Changing a mistake on your report - such as a payment that is wrongly labeled as late -- can take 30 days to three months, sometimes longer. Pay your bills on time. This is always a good practice, and it's especially critical that you make prompt payments close to the time you need a loan. That's because a late or missed payment in the last few months is likely to lower your score much more than an isolated late payment five years ago. Reduce your credit card balances. A heavily weighted factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Generally, it's good to keep your balances at or below 25 percent of your credit card limit, said Jeanne Kelly, founder of The Kelly Group in Brookfield, Conn., which helps clients improve their credit scores. Try CNN/Money's new Debt Reduction Planner for help wiping out credit-card balances. Pay off debt rather than moving it around. Since the ratio of your credit card balance to your credit limit is key, closing out an account and transferring the balance simply means you increase that ratio, which is likely to lower your score. In other words, say you owe a total of $2,000 on four credit cards, each of which has a $2,000 limit. Your total credit limit is $8,000, of which your total balance ($2,000) accounts for 25 percent. If you transfer all your balances to two cards and cancel the other two, your total credit limit is reduced to $4,000, and your $2,000 balance now accounts for 50 percent of that limit. Don't close unused credit card accounts near loan time. If you have several credit card accounts but are only using a few of them, you'll only raise your balance-to-limit ratio if you close the unused ones. You also shouldn't open new accounts when applying for a loan if possible. If you have a short credit history or very few accounts, opening a new credit line may lower your score since you don't have a proven track record, said Jan Davis, an executive vice president at TransUnion. What's more, a new account will lower the average age of your accounts, another factor in your FICO score. Where can I get my score? To find out specifically what you must do to raise your score before applying for a mobile home loan, you can order your score report from all three national credit bureaus. In addition to your score, you'll get your credit report, an indication of how your score ranks nationally and an explanation of how you can boost your standing. There are two reasons to get your score from all three bureaus: First, each bureau may have slightly different information about you depending on which companies have reported to them on your accounts -- reporting is not mandatory and many companies will report more regularly to the bureau based in their region. Second, mortgage lenders often look at all three of the bureaus' FICO scores and take the middle score - not the average -- to assess your eligibility, said Michael Daversa of Atlantic National Mortgage in Westport, Conn. So it's in your interest to know what that middle score is and make it the best it can be. Currently, only Equifax offers consumers their actual FICO score. It can be purchased online for $9.95 at Equifax or myFICO.com. TransUnion and Experian sell their own score brands, but spokesmen for the two bureaus say their scores are comparable to FICO scores in that any advice they give you to improve your score will apply to the FICO score as well. Like Equifax, the Experian score can only be purchased online for $9.95. The TransUnion score (included whenever you buy your TransUnion credit report, which will cost up to $9.00 depending where you live) may be purchased online, by mail, or, in some cases, by phone. If you were denied credit for a mobile home loan, you're entitled to a free credit report from the bureau supplying the information that was the basis for denial. Some states also entitle residents to a free credit report at least once a year. There is, however, no requirement that credit scores be offered free, although with TransUnion your score is automatically included in your report, whether you get it free or not.

 Mobile Home Loans Q & A  

• What is the Fico range for good, fair & bad credit rating with manufactured lending?
  Good credit is usually defined as the borrowers with few if any past or present collections, good income & credit over 680 fico. Fair credit borrowers would have more deragatories, lower income & credit from 600 fico to 679. Generally bad credit is those clients with a previous bankruptcy or significant ongoing collections and/or leins, significant debt, lawsuits amd/or past or present ongoing foreclosure and a credit score of 599 and below. (in some cases credit score is not the only determining factor for a fair credit loan. We will always try to qualify you fair credit first)
• What is debt to income ratio?
  Debt to income ratio is the calculation used by us to determine how large of a loan balance your income can support. Typically this calculation is figured by adding all your bill's minimum payments due each month, your space rent & new mortgage payment divide by your gross income.
• What is the lowest down payment I can put down: for good credit 5% down on land home & in park. In some case we allow for 100% financing when getting the home at a significant valuation.
• What loan term will be best for me?
  This depends on your goals. If your goal is to pay off the home quicker then a shorter term is suggested. If your goal is lowest payment then a longer term is best.
• What will my closing costs be?
  Good credit borrowers never pay points & the closing cost for these borrowers is usually $1300 to $1800. Bad credit borrowers will usually have to pay points. Typically, our closing cost ranges from $2700 to $4800 depending on the loan size. (In some cases bad credit borrowers may require more closing cost depending on overwhelming negative factors)We do have no closing cost programs.
• Can I consolidate bills? Yes. In some cases we actually may have to pay bills to get your debt versus income inline.
• Can the seller assist with down payment?
  Not on good credit loans. In CA, OR & WA we have a program where the seller can assist with securing part of the risk in a bad credit mobile home purchase loan... they may also assist with closing cost, repairs, fire insurance and home warranty. We do allow gift for down payment. 
• What items must be prepaid?
  There are no pre-pay items. Typically we allow you to finance into your new bad credit purchase loan up to 2 year of fire insurace, 2 years of a home warranty program, closing cost and up to 6 months of space rent.
• How long is quoted interest rates good for?
  Called a rate lock, under normal instances we lock the rate for 60 days which is free to the client. 
• How long will the approval take?
  With a complete file and motivated client approvals take 30 minutes with loan closings in as quick as 3 days for bad credit & 7 days for good credit.
• Will the loan have a prepayment penalty?
  Absolutely not. Even with a bad credit standing we won't be assigning a pre-pay penalty. 

• Experience.
  Founded in 1999, LoanJunction.com has processed and funded 10's of thousands of mobile home loans.
• Customer Service.
  We are only as good as our last clients says we are. That's why with every customer we'll move mountains for the privilege to be your lender. With caring staff, 24 hour customer service & online account management we intend to move mountains for you for years to come.
• Financial Resources.
  LoanJunction.com is a national lender drawing upon over 4 billion in investment capital for our clients needs. 
• Track Record.
  You don't get to be a proud AAA rated Better Business Bureau company by doing things the wrong way. We intend to keep it that way.
• Community Support.
  We have a larger responsibility to support our clients long after the transaction is done. Please visit our Park Crime Prevention Page to join us in keeping our park communities safe and crime free; Also As rent control advocates, no one is more out spoken about keeping our parks free of exuberant & predatory rent increases.
• Technology.
  With an eye on the 22nd century, our client management services are second to none. Our award winning online operations coupled with 24 live customer service, automated bill pay and rate decrease notifications we stand at the forefront of mobile home lendings' long awaited technological revolution.
• Hands On.
  There are no substitutions for rolling up the sleeves to get the job done right. That's why each client is assigned a proven & considerate account executive to oversee the loan transaction from start to finish. This is your guy or gal in the trenches with their "hands on" approach.
• Accountability.
  Each staff member is 100% accountable to you and your needs. Whether the loan has unforeseen difficulties, or tough measures need to be taken, our staff from the president on down will always field your calls and/or concerns.

Last Updated:  Thursday, January 03, 2008 

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