L
Lenders only make money when they lend,
right?
Well, you would’t know it from the way lenders
keep borrowers in the dark about how to be a
good borrower and qualify to borrow their money! You would think
that lenders would be bending over backwards to teach, coach,
and instruct borrowers on how to be a good borrower. We are
simply told we need a good credit score.
As a result, anyone who wants to borrow money is obsessed with
their credit score. The problem is borrowers have been led to
believe that their credit scores are the chief determining factor to
getting approved for credit—and it’s not true.
My intention in this article is to disclose some of the things I have
learned over the last 25 years as a credit and funding expert.
Many of these "secrets" revolve around what I call “fundability.”
Fundability is far more than a credit score. Fundability is the
composition and quality of your entire financial situation as
represented by your credit “profile” such that a lender finds you
attractive and desirable enough to extend you credit. As I have
learned, fundability is measured by three major factors: credit
score, credit profile quality, and underwriting criteria. Let’s take a
look at each of one of them.
There are certain fundamental aspects of credit scoring that ARE
A FICO® credit score
is a three digit score
that is generated by
filtering the data of
one of the credit
bureaus through a
specific algorithm
created by Fair Issac
Company (FICO®).
FICO® scores fall into
two categories: the
first is called an
“unweighted” score
and grades the raw
data of your credit
profile. This
unweighted score is
the score that lenders
and creditors provide
as part of their credit
card offers. However,
this score (even
though it is a FICO®
score) is NOT a score
that is used by lenders
to evaluate your
fundability.
important. The first of these is that your credit score, for it to be
fundable, needs to be a FICO® credit score. Most
borrowers are unaware of the difference between a
FICO® credit score and what I call FAKEO™ credit
scores.
.
Are you FUNDABLE,
or Do You Just Have a
Good Score?