Credit Overview
Individual
For individuals who seek wish to borrow money, the rates and terms that will
be offered depend on a credit score that is given you by a credit reporting
service that is based on your past history. Before applying for a loan,
you should review your credit history with each of the credit reporting
services, to assure that the information they have on you is accurate. In
the United States, there are three major credit reporting services:
Credit reporting forms often sell your name to direct mail advertisers.
Policies issued by the Federal
Trade Commission regarding credit reporting services privacy issues is a
concern . The FTC has a form that may be sent to the three major credit
reporting agencies to remove your name from their marketing lists -- go to www.ftc.gov/privacy
for a copy of the form.
Business
There is one major credit reporting service for businesses, operated by
Dun & Bradstreet.
As a business owner, you should obtain a DUNs (r) number because many
other businesses will request a DUNS number on their credit application forms --
the DUNs number is obtained from Dun and Bradstreet, which also offers other
credit reporting services for business.
As a business owner or multi-family landlord, you may wish to use a service
to obtain credit checks on your prospective employees or tenants. The
following are a sampling of many such services:
Tips:
- Credit scores will range between 300 and 850; a credit
score below 680 is considered by many to be sub-prime; a credit score above
720 is considered prime.
- Have no errors or delinquent bills on your credit report
- Be fully prepared to document income and assets with W-2
and pay stubs as well as tax returns
- have at least two months worth of mortgage, insurance, and
tax payments in savings (up to six months if borrowing $400,000)
- Before securing a second mortgage (or refinancing your first mortgage) you
will need to have an appraisal of the property that will be used to secure
the loan. Be sure to complete any planned improvements to the property
before the appraisal.
- Keep all accounts current, including mortgages, credit cards, personal
loans, etc. Be sure to make payments on all loans and accounts on or
before due dates, even if they are to be paid off with the proceeds of the
loan you hope to obtain.
- Do Not make any major purchases or charge any additional debt to credit
cards or existing lines of credit until the loan has closed
- Do Not allow others to make an inquiry on your credit, each time someone
runs a credit check on you, your credit score is reduced
- Do Not apply for credit anywhere else, or complete any other credit
applications
- Do Not shop on the Internet -- this will lower your credit rating, in part
because of the increased possibility of credit/identity theft
Uncover
the Characteristics of these other Developments:
