The Loch Ness Monster and an 850 credit score

Most of us are familiar with the alleged creature purportedly inhabiting Loch Ness in Scotland. “Nessie” was brought to the world’s attention back in 1933 however the scientific community regards the Loch Ness Monster as a modern day myth. In fact you are just as likely to see Nessie as you are an 850 credit score. Credit scores haven’t been around quite as long as the Loch Ness Monster. Back in the 1950’s insurance companies, retailers, banks and other lending businesses used data base information from thousands of customers to create these scores.

Over the past 10 years my company has closed and funded over 4,000 home loans. That’s at least 4,000 credit reports and not one with an 850 credit score. Supposedly 1 in every 100 credit reports has a perfect score. We’ve simply never seen it. That could be due in part to the fact that we primarily deal with first time home buyers. From what I’ve gathered from Equifax, TransUnion, and Experian, if you want a perfect credit score you will more than likely need the following:

* No bankruptcies, collections, judgments, or foreclosures, EVER!!
* At least 1 mortgage loan with no late payments.
* 4 or more credit cards with balances of no more than 35% of the credit limit.
* Minimal Inquiries
* Twenty plus years of credit use with multiple accounts.

As you can see the quest for a perfect credit score may seem pretty far from reach. Keep in mind that our past 4,000 clients all got great home loans and did not have a perfect credit score. In fact, there isn’t much difference in a 750 score than an 850 score. You don’t get any brownie points on your home loan application for having a score above 750.

Keep doing what you do, pay your bills on time and don’t let your debt get out of control. Remember to check your credit report periodically for errors and dispute those errors immediately with all three bureaus. And for best results always get all three credit scores with your credit report.

http://www.creditscorecowboy.com/ is your source for free credit scores and a free credit report, credit monitoring, identity theft software and a blog with a wealth of information about credit. People around the world depend on us for expert advice on how to maintain a healthy credit score.