Landlords Dance The FICO Fandango

Fair Isaac Corporation is the creator of the FICOcredit score that is used today by most lenders toevaluate consumer credit risk. FICO scores rangefrom a poor credit low of 500 to a best credit ratingof 850.

The higher the FICO score the lower the interest ratesoffered by most lenders. For example here is a lookat how FICO scores might affect a $150,000 30-year,fixed rate loan:

Score Interest Payment

720-850 5.64% $865

700-719 5.77% $877

675-699 6.30% $929

620-674 7.45% $1,044

560-619 8.53% $1,157

500-559 9.29% $1,238

Rates change frequently, but you can check the dailyaverage at myfico.com.

Fair Isaac has extended its FICO score to cover anexpanded population base. This expanded FICO coveragewill tap into non-traditional sources of consumer datato assess the credit risk of adults who have minimalor no credit history on file - such as recent immigrants, people with low incomes, recent widows and divorcees, and young people.

The company has tapped into non conventional ways ofestablishing credit scores. People pay rent, theypay catalog companies when they order something,they pay back payday loans -- there are various wayspeople show financial responsibility and Fair Isaacwill now be gathering that information to help determine FICO scores.

An estimated 160 million Americans have documentedcredit histories adequate for calculating classicFICO credit scores. An estimated 50 million consumers do not. Now that will change.

For real estate investors and landlords this means that we should be able to find a few more credit worthy buyers and renters than in the past.

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About The Author
Mark Walters is an investor and author. You can find hispublished material at http://www.CashFlowInstitute.comhttp://cfiblog.blogspot.com/