Most house-hunters looking for a mortgage have probably heard terms like "FICO Score" and "Credit Score," or even euphemisms like "strength of your application."

Credit scoring is a means of applying a sophisticated mathematical model to a consumer’s credit behavior. Simply put, does he or she pay their bills? It helps lenders determine if a borrower is likely to pose any type of credit risk.

A FICO score is a summary of an individual’s credit history from the three major credit bureaus: Equifax, TransUnion and Experian. Since each credit bureau collects credit data differently, an average of the three bureau scores is often the best assessment of an individual’s credit history. FICO scores range from approximately 300-850 in the U.S. with the average score around 678. A score between 620-659 is typically considered fair credit, 660-749 good credit, above 749 excellent credit, and below 620 poor credit.

Please keep in mind, consumers are entitled to one free copy of their credit report per year from each major credit bureau. All your client needs to do is visit www.annualcreditreport.com or call 1-877-322-8228 to obtain their free credit report.

For homebuyers whose credit is fair or poor, M&T offers alternative mortgage lending solutions. In many cases we can help these homebuyers obtain a mortgage if they are serious about attaining their goal.

M&T offers solutions to help almost every one of your clients become a homeowner. If you have a client in need of dedicated, personal attention, call M&T today.

Obtain your free

credit report by visiting

www.annualcreditreport.com

or calling

1-877-322-8228.

• 35% payment history (on time pays and delinquencies) – more weight is placed on the recent payment history

• 30% remaining debt capacity

• 15% length of credit history

• 10% accumulation of debt (last 12-18 months) – number of inquiries – opening dates

Vol. 07, Issue 11

Annual Credit Report Request

Service: PO Box 105281

Atlanta, GA 30348-5281

Experian: 888-397-3742

PO Box 2104

Allen, TX 75013

Equifax: 800-685-1111

PO Box 740241

Atlanta, GA 30374

TransUnion: 800-888-4213

PO Box 1000

Chester, PA 19022

• 10% mix of credit

(A) Installment (raises) vs. Revolving (lowers)

(B) Number of finance company loans – the more the lower the score

• Missing payments. Regardless of dollar amounts, it will take 24 months to restore credit after one late payment

• Credit cards at capacity or "maxed out"

• Closing credit card accounts. This lowers your available credit capacity

• Shopping for credit

• Opening up numerous accounts in a short period of time

• Have more revolving debts in relation to installment debts

• Borrowing from finance companies

• Debt ratio

• Income

• Length of residence

• Length of employment

• Pay down credit card balances

• Do not close credit card accounts. Credit capacity will decrease

• Continue to make payments on time. Older late payments will become less significant with time

• Slow down on opening new accounts

• Move revolving debt to installment debt

©2007 M&T Bank. MMR-DS177L