Understanding Your Credit Score

The Home Purchase ExpertsSM

Presented By Tom PessemierVice President of Mortgage Lending

One of the Ten Largest Retail Mortgage Companies in the U.S.

• Founded in 2000 by President and CEO Victor Ciardelli

• Licensed in all 50 states and Washington D.C.

• Approximately 170 offices nationwide

• Nearly 2,600 employees companywide

Accolades• Mortgage Executive Magazine, February, 2014

• Most Top 200 Originators nationally (35), Most Originators in the Top 1% in America (150)

• Scotsman Guide, 2013

• Ranked #1 in top retail volume, #2 in top overall volume and #3 in top volume gain on their Top Mortgage Lender list

• More Top 300 Loan Originators (30) work at Guaranteed Rate than at any other mortgage company

• Included on Chicago Tribune’s list of Chicago’s Top Workplaces three of the last four years

• Inc. Magazine’s 500/5000 List of the Fastest Growing Private Companies in the U.S. for the last six years

• President and CEO Victor Ciardelli named CEO of the Year for 2013 by Mortgage Executive Magazine a 2012 Ernst & Young Entrepreneur of the Year award winner

• Included on Crain’s Chicago Business list of the Fifty Fastest Growing Companies seven years running

• Our online application recently won the award for Best Digital Innovation at the 2013 Moxie Awards in Chicago

New GR Spokesperson – Ty Pennington

• Nationally recognized home design guru and host of Extreme Makeover: Home Edition

• Featured on guaranteedrate.com, Partner Xchange, and in our national advertising campaign, including print and TV

• Scheduled to appear at various events nationwide in 2014

Agenda

• Credit report purpose

• Information included on a credit report

• Credit score factors

• How to get a copy of your credit report

• Credit repair process

Credit Report Purpose

• Provides a history of your credit use to prospective lenders

• Allows lenders to assess risk of extending credit

to you

• Used for all forms of credit, including apartment rental, credit cards, student loans, car & home loans, etc.

Establishing Credit

• Apply for credit card with a reasonable limit

• Buy something for approx. $100, and pay back in 2 months

• Do it again, and make sure to pay on time!

• 4 trade lines will be needed to obtain a mortgage

• 12 months of activity are needed to develop credit history

What Information is Included in a Credit Report?

• Personal Info: name, address, date of birth, employer

• Credit Account History: credit card company/lender, type of account, credit limit, balance, payment history

• Public Records: bankruptcy, tax liens, and judgments

• Credit Inquiries: creditor and date of inquiry

What is a Credit Score?

• Summary of credit report info represented as a single number, based on a mathematical calculation

• FICO (Fair, Isaac, & Co.) most common score type

• FICO scores range from 300 – 850; the higher the better

• Predict future payment history for creditors

• Scores are “fluid” – recalculated each inquiry

Credit Score Factors (estimated)

• Payment History: 35%

• Amount Owned: 30%

• Length of Credit History: 15%

• New Credit: 10%

• Type of Credit Used: 10%

100%

Getting Credit Reports

• There are 3 credit bureaus and each has a credit score for you (scores may be different)

• Equifax 800-685-1111 or www.equifax.com

• Experian 888-397-3742 or www.experian.com

• TransUnion 800-888-4213 or www.transunion.com

**

*Apply on our website and receive your tri-merge

credit free!

How to Use Your FICO

• If denied credit, ask lender for “score reasons”

• Up to 4 score reasons provided with your FICO that

explains why the score isn’t higher, such as:

• Number of accounts with delinquency

• Amount owed on accounts

• Too many accounts with balances

• Understanding these reasons can help improve your FICO over

time

Credit Score Cautions

• Debt settlement and debt management plans may hurt your credit for at least 2 years, especially to a mortgage lender

• Once you’ve received a pre-approval from your mortgage lender, it’s important not to make any other credit purchases that could negatively impact your score. This will be checked 2 days prior to closing, and could impact your approval.

Credit Score Cautions

• Mortgage lenders now require a “soft pull” credit inquiry (FICO score not pulled) to be pulled upon submission of clear to close conditions. If new debt has been obtained, the loan file must be reevaluated thru AUS to ensure compliance with DTI and borrower eligibility requirements.

Credit Repair

• You cannot “repair” poor credit

• Derogatory credit remains on your report for up to 10 years

• Avoid paying for credit repair services guaranteeing to fix poor credit

• You can correct inaccurate information

• Dispute incorrect credit information

• Update personal information

• You can improve credit behavior (limit credit lines & balances, pay on time)

Credit Help

• American Consumer Credit Counseling:

• www.consumercredit.com

• 800-769-3571

• National Foundation for Credit

Counseling:

• www.nfcc.org

• 800-388-2227

Tom PessemierVice President of Mortgage Lending

O: 941.313.8148 M: 425.780.6374

Tom.pessemier@guaranteedrate.com

guaranteedrate.com/tompessemier

State Lic: FL-LO23120-MLD618, WA-MLO-117989 - CL-2611

Contact

NMLS (Nationwide Mortgage Licensing System) ID 2611 AL - Lic# 21566 AK - Lic#AK2611 AR - Lic#103947 - Guaranteed Rate, Inc. 3940 N Ravenswood, Chicago IL 60613 866-934-7283 AZ - Guaranteed Rate, Inc. - 14811 N. Kierland Blvd., Ste. 100, Scottsdale, AZ, 85254 Mortgage Banker License # BK-0907078 CA - Licensed by the Department of Business Oversight, Division of Corporations under the California Residential Mortgage Lending Act Lic #413-0699 CO - Guaranteed Rate, Inc. Regulated by the Division of Real Estate, 773-290-0505 CT - Lic #17196 DE - Lic # 9436 DC - Lic #MLB 2611 FL - Lic# MLD618 GA - Residential Mortgage Licensee #20973 - 3940 N. Ravenswood Ave., Chicago, IL 60613 HI - Lic#HI-2611 ID - Guaranteed Rate, Inc. Lic #MBL-5827 IL - Residential Mortgage Licensee – Illinois Department of Financial & Professional Regulation, 3940 N Ravenswood Ave, Chicago, IL 60613 MB.0005932 IN - Lic #11060 & #10332 IA - Lic #MBK-2005-0132 KS - Licensed Mortgage Company - Guaranteed Rate, Inc. - License #MC.0001530 KY - Mortgage Company Lic #MC20335 LA - Lic #RML2866 ME - Lic #SLM1302 MD - Lic #13181 MA - Guaranteed Rate, Inc. - Mortgage Lender & Mortgage Broker License MC 2611 MI - Lic #FR0018846 & SR0018847 MN - Lic #MO 20526478 MS - Guaranteed Rate, Inc. 3940 N. Ravenswood Ave., Chicago, IL 60613 - Mississippi Licensed Mortgage Company, Lic # 2611 MO - Guaranteed Rate Lic # 10-1744 MT - Lic# 2611 Licensed in NJ: Licensed Mortgage Banker - NJ Department of Banking & Insurance NE - Lic #1811 NV - Lic #3162 & 3161 NH - Guaranteed Rate, Inc. dba Guaranteed Rate of Delaware, licensed by the New Hampshire Banking Department - Lic # 13931-MB NM - Lic #01995 NY - Licensed Mortgage Banker - NYS Department of Financial Services- 3940 N Ravenswood, Chicago, IL 60613 Lic # B500887 NC - Lic #L-109803 ND - Lic #MB101818 OH - Lic #MBMB.850069.000 & Lic #SM.501367.000 - 3940 N. Ravenswood Ave., Chicago, IL 60613 OK - Lic # MB001713 OR - Lic #ML-3836 - 3940 N. Ravenswood Ave., Chicago, IL 60613 PA - Licensed by the Pennsylvania Department of Banking and Securities Lic #20371 RI - Rhode Island Licensed Lender Lic # 20102682LL, RI - Rhode Island Licensed Loan Broker Lic # 20102681LB SC - Lic #-2611 SD - Lic# ML.04997 TN - Lic #109179 TX - Lic # 50426 & Lic # 47207 UT - Lic #7495184 VT - Lic #LL6100 & MB930 VA - Guaranteed Rate, Inc. - Licensed by Virginia State Corporation Commission, License # MC-3769 WA - Lic #CL-2611 WI - Lic #27394BA & 2611BR WV - Lic #ML-30469 & MB-30098 WY - Lic#2247