Every Monday Morning at 8:15am, join me on my Facebook page as I sit down with a local lender, and do a live interview and talk about a Mortgage Tip that may help YOU with your next Real Estate Purchase. 

This morning I sat down with Mark Waterman from Great Western Bank. Listen as Mark explains some of the new changes in FICO scoring. You can reach him at 605.627.0602 or Mark.Waterman@GreatWesternBank.com  His office is located at 1302 6th St., Brookings SD 57006 or on the web at www.GreatWesternBank.com

 Changes in FICO scoring

- All right, let's try this again guys. Sorry for the technical difficulty. Shane here from the Brookings Home Team, powered by Century 21. Monday morning, we're just a tad past 8:15, but that's all right. We still got Mark here from Great Western, to jump in and talk to us today about Monday Morning Mortgage Tip. Before we do that, excuse me. I'll have all of his information, on the top, on the bottom, on the sides, wherever your device allows you to see that, so be sure to reach out to him if you have any questions and as always feel free to share or tag this video with anybody else that you feel would be of interest in it. So, Mark what do you got for us today?

- Yeah, thank you very much, good morning. At the end of last week, Fair Isaac Corporation, better known as FICO had released an update saying that they had a new version that they would be rolling out with, that, for a credit scoring model. I guess essentially what I gathered from the article, that there was a market watch article on MSN, and they were basically saying that they would almost create like a wider gap between the good credit and the bad credit. People with better credit would almost get rewarded more, and then people you know that had some lesser credit scores might get dinged a little bit more, more or less. And then they were eventually, they were also going to use like trending data just like over the last 24 months. They'd start putting together trending data, and essentially I think what they were saying is there was a quote on here that they had and it said, "FICO score 10 will weigh personal loans more heavily "penalizing borrows who consolidate debt "with personal loans, and then choose to rack up more debt." So, I guess essentially if you're gonna consolidate loans and then you start paying it down over time, they're gonna reward you for that. If you consolidate debt, and then that debt remains the same or you know, you take out additional debt over a 24 month period, even though you're making your payments on time you know, you're not gonna get rewarded for those timely payments as much as if that debt was going down. So, at the end of the day you know, they basically said there's different scoring models. So while people, different companies will be close, you know not everybody's the same. Just like iPhones have you know, iPhone 6, 7, 8, 9, 10. There's different scoring models out there, and not every creditor is using the latest version as well. So, realistically what that means for you, the borrower, you know the three main things with credit still apply. That's making your payments on time, it's not having too many inquiries you know in recent months, and then the loans that you do have out there, it's keeping your balances as low as possible. So, I wouldn't get too hung up on the new version. You know, I don't think a lot of people are gonna starting using it right away. I think some of that takes time with technology, and just implementing some of those things, but we have other episodes out there where it talks about you know how to improve your credit and stuff as well that you've done, but it's always something to be cognisant of, especially with the buying season you know, coming around here in the spring, and you know, take care of your credit.

- And you bring up a good point. That's why I wanted to, I'm glad you brought this up here today, 'cause it is, as we get into spring here obviously historically that's our busiest time or can be our busiest time. Not only for sellers, but for buyers as well. So, you want to have all your ducks in a row before you go out there and start looking at those homes, so you know exactly where you sit qualification wise. That your payments are right where you want 'em, you know what the range of the price of the house is gonna be.

- Yeah.

- Where you want to be at that, and your FICO score affects some of that there. So, . Excuse me.

- Well, and throughout the process I mean you know, the FICO score can affect rate you know eligibility, you know I mean it does come into play, so.

- And I'd heard to that you know, this can affect about 40 million people here in the United States. Whether it's dropping you maybe roughly 20 points or it could be increasing you by 20 points. So, but about 40 million people one way or the other. But, all right anything else? Good stuff.

- No, I mean

- Okay.

- If anybody has any specific questions you know, I can certainly try to help. I'm not a you know financial advisor or expert, but I see enough credit reports that I can you know, I can help guide you on how to improve your score as well, so.

- Perfect, love it Mark. So thanks for joining me again today.

- Yeah.

- We'll be back next week for our next Monday Morning Mortgage Tip. Super Bowl weekend guys. Who you got? 49ers or Chiefs? This guys got the Chiefs.

- Go Chiefs.

- Sorry guys, I'm a 49er's fan this week. Have a good one, we'll see you later.

- Thank you.

Thinking of selling and/or moving to Brookings, Volga, or any surrounding areas? Got questions? I’m here to help! Visit BrookingsHomeTeam.com for more details!