Re: How Much Is A Credit Score (FICO) Worth?

"abby" <abbybrown@[EMAIL PROTECTED]
> wrote
> I just took advantage of a Massachusetts law that allows a 
> free credit re****t once a year.

Federal law now requires that each legal U.S. resident be 
allowed "one free copy of his or her credit re****t from each 
credit re****ting agency once every twelve months. This 
information is available at the only government-sanctioned 
credit re****ting agency-operated website, 
annualcreditre****t.com, by calling 1-877-322-8228, or by 
mailing the Annual Credit Re****t Request Form." (From 
Wikipedia)

> Our re****t is clean and accurate but they do not include 
> the credit score, FICO.  The FICO is $7.95 from Equifax. 
> My only concern is that we haven't had a loan since 1995 
> which I paid off in a few months.  We are planning on 
> buying a winter home when my wife retires in four years. 
> With a clean history is the FICO useful now?  Ever?

I am going to assume that you plan on putting at least 20% 
down on this second home. I just wouldn't feel good making 
suggestions to a stranger, whose financial situation is 
almost unknown, here unless you plan on this.

I think knowing your FICO or its approximate value would be 
useful to you right now, if only to help educate you and 
yours on the loan process today. Googling for {"automated 
underwriting" "percent of lenders"} turns up re****ts that 
somewhere around 90% of lenders today use automated 
underwriting which very likely means FICO is a large part of 
the input to the decision-making process. Myfico.com itself 
states that 90% of the "largest U.S. banks" use FICO. The 
automated-FICO approach is said to be less expensive to 
lenders, and it cannot discriminate by race or gender. I 
have yet to find re****ts that lenders that use manual 
underwriting are somehow superior, except maybe in very 
unusual cases. I doubt that banks that use manual 
underwriting always offer lower mortgage interest rates. I 
think it may be just the opposite, based on reading about 
manual underwriting today. I would welcome citations from 
others, either way.

I would do three things now:

1.
Try the estimator at 
http://www.myfico.com/FICOCreditScoreEstimator/Default.aspx

2.
Read further about what determines the FICO score at 
http://en.wikipedia.org/wiki/FICO_score#Makeup_of_the_credit_score
. 
Also read more at myfico.com and at sites found by googling 
about what sort of credit score range is necessary for the 
best interest rates. Off the top of my head, I believe 
anything higher than 750 or so will get you the best rate.

3.
Make sure you can afford this house. Not to be presumptuous, 
but a flag went up when you indicated that one of you was 
retiring and yet planned to seek a mortgage for another 
house.

It sounds like you'll be fine, but why not get more definite 
peace of mind using the tools above? 

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