First American CREDCO - Credit Education

	Finding the Right Loan

	Homebuyer Checklist

	Determine Credit Worthiness

	Common Credit Myths

Myth: Lenders base their loan decision solely on my FICO score.
Fact: Lenders use a number of tools to determine whether or not they will loan money to someone, such as the amount of debt you can handle given your income, employment stability, and bill payment history. A good FICO score certainly helps, but if you do not have traditional credit history, there are other avenues a lender can explore to assess your credit worthiness.

Myth: Credit scoring is unfair to minorities.
Fact: No information about race and/or gender is contained within a credit report. The Equal Credit Opportunity Act (ECOA) prohibits lenders from considering race when issuing a loan.

Myth: I cannot buy a house because I have no credit history.
Fact: In the past this was true; however, many of today’s lenders realize that there is a large number of American consumers who do not believe in using debt for purchases. Just because these people do not have a traditional credit history does not mean they are not credit worthy. By checking such items as rent payments, utility payments, savings history and checking account status, a lender can get just as good a risk assessment of a buyer as they can with a traditional credit score.

Myth: No credit is the same as bad credit.
Fact: False. No credit simply means that you have not used debt to finance purchases in the past. Bad credit means that you have used debt and have not been able to pay it back in a timely manner. People with no credit have traditionally been placed in a group with bad credit, but this is changing. If you have no traditional credit, credit assessment tools such as First American CREDCO’s Anthem Report can be used to supplement a traditional credit report in a mortgage application. Lenders listed in the Specialty Lender Directory on this site specialize in such loans.