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Peter Thompson 2626 Warrenville Road Downers Grove, IL 60515 Direct Line: (630) 598-2375 Cell Phone: (630) 479-6424 |
PeterT@promortgagepartners.com
Free refinance Guide – Avoid the mistakes that can cost you thousands
Questions? Whether purchasing a new home or refinancing, let me know how I can help.
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Your privacy is important to me. Your information will not be shared, sold or exchanged with anyone else and I will contact you personally by phone or email.
Illinois Residential Mortgage Licensee #5814
Credit where credit due – understanding your FICO Scores
There is a tremendous amount of information on your credit report, but what most lenders focus on now is what’s called the FICO score (Actually, there are 3 FICO scores, one from each repository. We generally use the middle score). The FICO score is a computer model that weighs the overall risk in your credit profile. The idea behind scoring is that they measure the likelihood of a customer’s defaulting on a loan.
The scores can range from a low of 350 to a high of 850, but it’s rare to see scores at either extreme. Most people’s scores are in the 600s and 700s. Approval depends on other factors besides credit, but a high credit score will go a long way toward helping your situation. Generally, if your score is in the high 600s or above, it’s considered excellent credit. If you are in the low 600 range, there are still plenty of options.
There are five factors that comprise the credit
score. These are listed below in order of importance, just as an underwriter
will look at the score:
• Payment History: 35% impact. Paying your bills on time and in full has a positive impact. Late payments, judgments and charge-offs have a negative impact. Missing a high payment has a more severe impact than missing a low payment. Delinquencies that have occurred in the last two years carry more weight than older items.
• Outstanding Credit Balances: 30% impact. What they’re looking for here, is how many accounts do you have open, and what the balances are on the accounts. If you owe a lot of money on a lot of accounts, this is a risk that, in the future, you’re more likely to make payments late, or not at all. The amount of your outstanding balance compared to your available credit limit is important here. If you are near your max, it hurts your score. The less available credit you use the better. It helps your score if you spread your debt around several cards, using no more than 30% of your available credit limit.
• Credit History: 15% impact. How long have you had credit, how long has it been since you’ve established each particular account, and how long has it been since you’ve used the credit line? A seasoned borrower with well established credit is stronger in this area.
• Type of Credit: 10% impact. A mix of auto loans, credit cards, and a mortgage is ideal, and reflects better than if all of your debt is from credit cards only.
• Inquiries: 10% impact. Every time you apply for credit, it shows as an inquiry in the credit repository. Inquiries can lower your score because applying for more credit means you may be taking on new debt. This takes into account the number of inquiries that have been made on your credit history within the last six months. Each inquiry can cost from 2 to 50 points on a credit score. If your credit score is high, the inquiry won’t affect you much. But if your credit score is lower, new credit is looked at as a big problem, and can bring your score down by as much as 50 points.
• Remember, these scores are calculated by a computer that’s not taking any personal factors into consideration. When a credit report is generated, it’s simply a snapshot of your credit profile for that day. Scores change, sometimes by large amounts in a short period of time. You just need to be aware of what you’re doing, and make sure you don’t go on a spending spree before applying for a loan. Again, to make sure you don’t have a problem when you’re ready to buy, it’s important to have a loan officer review your credit and make sure you are on the right track.
Testimonials
- “I felt he went above and beyond his job. Very satisfied."
Terry S.
Chicago, IL - "This was my first mortgage and he held my hand all the way. It was a great experience."
Rosaria A.
New Lenox, IL - “Pete Thompson was extremely helpful. He was honest and service oriented. After reading his homebuyer’s guide, I knew what to expect. We will definitely use Pete again, and refer him to all our friends.”
Wayne and Beth B.
Lemont, IL - “Pete Thompson understands our needs. He answered all our questions and made the loan process simple and easy. He was great.”
Bob and Sherry R.
Chicago, IL - "Pete Thompson was great! Helpful, friendly, he went out of his way to make us feel good. I've already passed his name on to my brother, and recommended him strongly."
Jason W.
Chicago, IL - "Pete made everything so easy. We'd heard horror stories from friends who had bought earlier, but it all went great. He made it effortless on our part."
Dan and Sherrie P.
Wheaton, IL - "Pete Thompson was very helpful and informative. I was very happy with the services I received. As a first time buyer with no money down I didn't know what to expect."
Mike B.
Oswego, IL - “Pete was extremely helpful. We felt very confident with his expertise and information. Everything went very smoothly.”
Mike and Monica A.
Glen Ellyn, IL - “An outstanding professional! Pete is the best!”
Daniel and Peg O.
West Chicago, IL - “Pete Thompson was great! Helpful, friendly, he went out of his way to make us feel good.”
Kathy N.
Winfield, IL - “Very nice to work with. Very efficient service.”
Harry and Mary S.
Naperville, IL - “Pete handled the entire process with the professionalism and courtesy I try to show clients in my business.”
Cynthia B.
Chicago, IL - “I knew what to expect upfront, and everything happened just as Pete said it would. A great experience.”
Nick P.
Bloomingdale, IL - “Pete was efficient, thorough, enthusiastic, informative, responsive and proactive in all our dealings with him. It was an honor to work with him.”
Mark and Daphnee M.
Naperville, IL - “Everything was totally professional and seamless – greatly appreciated.”
Richard and Jeanie S.
Huntley, IL - “Pete Thompson made my financing end of buying a home far less stressful than in the past using other mortgage companies. Thank you, Pete.”
Jerry P.
Bloomingdale, IL - “I relocate regularly, and have bought several homes in the past. The level of service I received from Pete and his team was second to none!”
Roman S.
Oak Lawn, IL - “The service was very good and it was a pleasure working with you. I am sure we will be in touch in the future.”
Ron and Lisa S.
Naperville, IL - “I was not sure what to expect, but everything went so smooth it was surprisingly easy. Having the information upfront really made a difference.”
John T.
LaGrange, IL - “We counted on Pete to take care of everything because we lived in Wisconsin. It couldn’t have been handled better.”
Robert and Karen H.
Lombard, IL - “Excellent service. Pete was a pleasure to work with.”
Kent S. and Edward.
Chicago, IL
