CREDIT SCORING: You don't know how they do it, but you know that it is very important to your credit power. Your credit score will be reviewed an analyzed when you buy a home, a vehicle, obtain new credit lines with credit card vendors, make personal loans or participate in any new purchase that requires a credit review.

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The interest rate charged to you will be based, probably about 90% on your credit score. Lenders have discovered that

How much money you make,
How much money you owe,
Whether you rent or buy,
How many people you support,
Or, anything else one would believe to be important in extending credit, is not as important as the credit score you receive when the scoring agencies compute your credit scores.

Lenders know that, the higher your credit score the less likely you are to default on credit payments for home loans, auto loans, credit card payments or anything else that would be reported to the credit reporting agencies.

The old system of looking at your income and computing a percentage of your gross monthly as an "allowable" mortgage payment is old news. Ratios are old news to many credit providers. You may be granted a loan with a front ratio of 30, 35, 40, 45% of your gross monthly income IF YOUR CREDIT SCORE IS HIGH ENOUGH.

What is high enough?? Some lenders will expect to give loan approval with a 40% of gross monthly income for borrowers with a credit score of 770 or higher, perhaps more than 40%. A credit score of 630 will qualify most borrowers for a good interest rate. Other factors are job stability, other debt, cash reserves and down payment.

This is the new face of mortgage lending. It isn't only what you make, or owe, but how you make your payments.

HOW YOU MAKE YOUR MONTHLY CREDIT PAYMENTS IS THE MOST IMPORTANT FACTOR IN APPROVING HOME LOANS FOR HOME BUYERS.