What Is A Credit Score, and Why Should I Care??   A Little Background There are 3 credit reporting agencies in the U.S. that most or all of your creditors report to.  Any time you have an open account that you are paying on (such as a credit card, car payment, furniture account, mortgage, etc), that creditor reports monthly about how you pay, if you have been late, how many times you were late, how long the account has been opened, the balance and payment, and what type of account it is. Also, every time you apply for new credit, it is recorded on your credit file at the reporting agency.  If one has too many credit inquiries over the past 6 months to 1 year, it could negatively affect the credit score.  Any late payments, closed accounts, repossessions, charge-offs, collection accounts, judgements, and bankruptcies also negatively affect the credit score.   What Does My Score Say About Me? Each of the 3 reporting agencies has a particular formula for determining what your credit score is.  Credit scores generally do not dip below 300, and can get as high as the 900+ range.  As in most things, the higher the score the better.  In the perfect situation, your credit score reflects your probable credit risk.   In other words, it allows the lender to look quickly to determine if you are a good credit risk for the money you are requesting from them.  If you have been paying your loans on time, and don't have any judgements, collections, or bankruptcy, chances are your credit score is average or better.  However, if you have been late on a mortage or car payment in the last year, or you have bad credit from other sources, your score will probably be significantly below average.  The "average" score that we see is in the mid 600 range.  However, for most of the investor programs that we work with, the lenders are looking for 700 or better.  Remember, an investment loan is a bigger risk than an owner occupant loan, and the bank wants to know that you are worthy of the loan.  We recommend that you find out your credit score before you come to see us about getting into investment purchases.  You can contact your local banker and they can usually help you with this.  If you have trouble, let us know and we can get you in touch with one of our lenders.