Down 10 to 30 pts. 

Down 25 to 45 pts. 

Down 60 to 80 pts.

Down 90 to 110 pts. 

Down 45 to 65 pts. 

Down 105 to 125 pts. 

Down 85 to 105 pts.

Down 140 to 160 pts. 

Down 130 to 150 pts.

Down 220 to 240 pts. 

Carlsbad, CA - You may know your credit score – but do you have any idea how it is calculated?  In a formula that is so secretive that they could tell you – but then they’d have to kill you, we never know how our actions will affect that score. 

How will your credit score change if you close a credit card?  Should you go through the hassle of a short sale, or just allow your house to go into foreclosure?  What if things are tight, and you go over your credit card limit?

Your credit score is a three digit number normally between 300 and 850.  It is the number used to determine the risk of giving you a loan.Scores over about 715 are considered good scores, and typically will get you the best interest rates.  Scores over 600 and under 715 are moderate scores. 

And although you may get a loan, you may pay a premium interest rate to get it.  Scores under 600 are typically considered to be a high risk borrower.  These borrowers either may not get a loan, or may pay much higher interest rates on their loan.

Although the formula is still a mystery, Fico.com has at least provided a table showing some of the most common penalties to your credit score.

FICO’s information shows that bankruptcy does the most serious damage to a credit score (up to 240 points), followed by foreclosure (up to 160 points) while maxing out a credit card has the least numerical impact (as few as 10 points).

Those with good or excellent credit — so-called prime borrowers — put more points at risk with each mistake. For example, someone with an average credit score of 680 who pays a bill 30 days late will see a drop of 60 to 80 points. But for someone with an excellent credit score — 780 — that same delinquency can cost 90 to 100 points.

If considering whether or not to try to sell your house through a short sale vs. allowing a full foreclosure, please keep in mind that settling a debt (short sale) with a lender can save you 50 to 100 points (and the ability to get another loan in the future) or MORE!  If you have any questions about how this might impact you personally, or how to market your property for a short sale, please contact The Mewborn Team.  We are happy to sit down with you for a no obligation consultation about your best options.