Q: We are getting ready to buy a house.  The problem is our FICO score is only around 610.  We have nothing negative for 6 years.  We think the problem may be our bank does not report to the credit bureaus.  We have had several personal loans, and car loans thru them that have been paid off with no late pays.  We also currently have a loan through them for a 2002 Chevy Truck that we've paid down to about $6,000.00.  My question is this, are our scores low because our bank does not report to the bureaus and will a mortgage company take a look at our bank loans and see them favorably and apply that to our fico scores in making a decision or will they only look at the fico scores.  We only recently discovered that our bank doesn't report to the bureaus and we've banked with them for 10 years. 

Thanks.   LD Brown

A: Dear LD Brown:

Credit scores have become immensely popular among creditors in the past 10 years.  While helpful to creditors, credit scores can be a constant source of frustration for the consumer due to the complicated and mysterious way in which they are calculated.  The creators of credit scores hold the exact formulas pretty tightly to their vest but I can tell you the areas of your credit that they look at most closely.  Your payment history is the most important variable used to calculate your score making up roughly 35% of your score.  About 30% of your score is based on how much you owe.  So, if you are at or close to your limit on most of your credit cards and loans, your credit score will be negatively affected almost as much as if you are late on your payments.  Other important factors include: length of credit history 15%, new credit 10%, and types of credit in use 10%.  It is difficult to determine why your score is only 610 without looking at your credit but I believe that you should be able to obtain a loan at a competitive interest rate even with a 610 credit score.  For more information please call 314.787.2900 or www.midwestmortgagecapital.com .  Good luck.

Jerry