Beyond the amount of money you have to put down, the current interest rates, and the supply of housing that is available, your credit score determines whether you can buy homes for sale in the Central Valley. This number, which ranges from 300 to 850, quickly tells finance companies at a glance how good you are with handling credit.

• Good scores from 700 to 749 or excellent numbers from 750 to 850 get you the best deals in financing, not just for a home but for anything having to do with money, such as buying a car or getting a credit card.

• Fair scores from 650 to 699 may get you financing but at higher than normal rates.

• Poor scores from 500 to 649 or very poor numbers from 300 to 549 may prevent you from getting any kind of financing or credit at all.

Good News

The good news is that starting on July 1, the three major credit bureaus – Equifax, Experian, and TransUnion – are eliminating specific kinds of negative information from credit reports, including civil judgments and tax liens, if they do not match three of the following four criteria: name, social security number, address, or birth date.

This decision comes in the wake of legal settlements in over 30 states where attorneys alleged that such judgments were often ascribed to the wrong individuals, hurting their chances at obtaining everything from a home mortgage to a health club membership.

Out of 200 million Americans with credit scores, about 12 million should see a decrease when the new standards take effect.

However, the increase will be under 20 points for about 11 million consumers. This may not seem like much, but if your score is near the border between two categories, it may mean the difference between you obtaining financing, or getting either adequate or great rates.

Some lenders are concerned that these rules may make certain applicants appear more credit worthy than they really are, especially if the reason for the increase is because the name or address was simply misspelled. However, the Consumer Data Industry Association, which represents the credit bureaus, says that the new rules “carefully balance the concerns of consumers and regulators about public record accuracy while at the same time ensuring that creditors can continue to rely on credit report data.”

Check Your Credit

To find out if the new rules affect you, check your credit. As part of their service, your bank, credit union, or credit card company may already allow you to look at your credit score without cost just by asking. If not, you can also obtain your score for free at creditkarma.com. You’ll need to register first and confirm your identity.

After you receive your score, use the site to view your credit report. See if there are any judgments or liens listed, which by law, stay in your report for seven years. Be sure to also click the “TransUnion Credit Report” and “Equifax Credit Report” buttons at the bottom of the page for more detailed information about your finances.

If you discover incorrect information associated with any judgments or liens, you have two options. You can wait until the new rules come into effect because it’s likely that the judgment or lien will fall off your report. Or you can contact the reporting credit bureau to make the correction. They are legally bound to investigate any issues you raise and to correct them unless they consider your report frivolous.

If you want more information about how your credit score impacts your home purchasing power, or if you just want to check out one of our neighborhoods in person, please contact us.

Lisa Walker

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