Some good information in there, but also some that falls short due to no explanation.
"(Scores range from 350 to 800 points; scores of 620 and above are considered good.)"
Well, that's flat out wrong, on the high end. Most say scores go up to 850, some say 900. Nobody but Fair Isaac knows for sure. I just pulled one that had scores of 791, 806 and 815.
It is true that for most loans we go off of the middle score and that there can be a HUGE difference in the 3 scores. I've seen almost 100 pt difference before. All boils down to who reports where and what that credit line looks like. If a charge off is reported by a local finance co. to the predominant bureau in that region of the US, but not the others, that bureau will reflect the lower score. Same situation for a good credit line that may not report to all 3.
Some lenders, sub-prime, may let you take an average of the 3, or just look at the better 2 etc. Very different situation.
"On a 30-year fixed-rate mortgage, individuals with scores between 700 and 719 were paying an average 5.94 percent in early January. Those with scores between 620 and 674 were paying 7.63 percent."
They aren't taking into account that loans are submitted to Fannie Mae or Freddie Mac for a type of approval. If you get an "accept", you're in like Flynn, regardless of your score, although score is a part of it. I'd say that the difference reflects the difference in rates for Conventional vs. FHA financing. A rate on an FHA is going to be higher than Conventional, and individuals that either have reasons for FHA financing due to downpayment, or need the FHA due to some credit problems is what is really reflected there. People with FHA loans do not tend to refinance until they can do so onto a Conventional loan, and by that time their score is probably up into that upper range and they get the better rate associated with the Conv loan. That is *NOT* to say that people with FHA loans have bad credit. FHA loans meet different needs. Most with the scores in that upper range will be going for Conventional financing though, on average, for various reasons.
There's a lot more to be considered than the reporter brought to the surface. I do agree that poeple should have free access to their scores and credit reports once a year. There is way too much incorrect info on them that people don't know about.
