Every payment you make to a credit company, whether it be to Mastercard, Visa or car payments to GMAC, is registered with several credit reporting agencies. Each time a payment is late, a notation is made on your credit file which affects your overall credit rating. Many different factors go into obtaining credit ratings, but the end result is used to determine your history as a borrower.

The various credit reporting agencies have come up with their own mathematical formulas to determine a number which applies to your credit profile. Most commonly, a FICO or "Fair Isaac" score is used. For the purposes of obtaining a loan from a conventional lender and getting the lowest interest rates available, a minimum score of +640 is necessary. What this number says is that this person has made most of their payments on time and does not keep revolving credit lines at their maximums. Thereby inferring that this person is willing to pay back money and therefore makes a good borrower.

A score lower than +640 means, to creditors, that paying back monies borrowed is not a priority to the borrower. Therefore, a loan with this borrower, may go unpaid.

A person can change their score for the better or worse at any time. By bringing accounts current which were delinquent, keeping balances on revolving debt well below maximums, and confronting judgments or collections a borrower can change their credit ratings enough to make a serious difference in the score.

All of this credit discussion directly translates into interest rates. The higher the score, meaning more current accounts and less delinquencies means companies will be more likely to give you, as a borrower, the best interest rates. As the credit level gets worse, the interest rates go up.

Fortunately, CSI Mortgage has programs which can accomodate any credit level, including past foreclosures and bankruptcies.