ARE YOU FUNDABLE, OR DO YOU JUST HAVE A GOOD SCORE? MERRILL CHANDLER
By definition credit repair strategies and those
service providers who offer them, are completely
ignorant of fundability and do not know how to
create a credit profile that will contribute to credit
approvals. In fact, most credit repair firms, in a
feeble attempt to help their clients “rebuild” their
credit, refer them to lowvalue junk credit
instruments, etc. These junk cards pay referral fees
so the credit repair company wins, but the clients balance, recency of last bounced check) and the 24
take another hit to their credit. It is a travesty how month lookback period. Underwriting software
much ignorance there is among organizations who calculates behaviors over the preceding 24 months
say they are trying to help disadvantaged and measures it in a logarithmic scale. A borrower’s
borrowers. behavior over the last 24 months is the key indicator
of what the borrower's behavior will be for over the
Let's take a look now at the final fundability factor: next 24 months. The 24month lookback period
underwriting. Underwriting software expands the cannot be underestimated in its importance to your
requirements of fundability significantly. Since it is fundability.
the lender that is actually extending the credit (and
carrying all the risk), lenders have developed (in The next time you are at a cocktail party or social
concert with FICO®) their own underwriting criteria gathering and someone tries to dazzle you with their
and software. credit savvy, politely interrupt them and ask them to
share their understanding of ANY of the topics you
Underwriting software takes into account credit have learned in this article. When they stutter and
score, income, debt load, current banking hum and ha, overwhelm them with all your
relationship (checking account, average daily knowledge about fundability!
Every borrower in this country, and every
individual in the upcoming generation needs
to learn what we have reviewed here. We
cannot remain in our ignorance. We cannot
be
“at
effect"
of
these
billiondollar
organizations who notsosecretly profit from
our ignorance. We need to turn the tables
and make ourselves knowledgeable AND
fundable. If knowledge is power, then applied
knowledge is a superpower.