[ben]

While calculation on credit scores is done, following avenues are deeply researched:

• All the information about your payment is researched. This includes all the credit cards, retail account, any type of car or mortgage loans.
  
• Public records are extensively reviewed and the collection items such as bankruptcy, foreclosures, suits, wage attachments, liens and judgments are widely researched.
  
• Any specific details on late or missed payments i.e.. delinquencies are also judged. The credit scores are calculated on the basis of how much debt is owed, how recently it occurred, how many accounts are in late payments and how many are not.

You should consider keeping these avenues intact so that you can see an increase in your credit scores.

[4u.bryan]

Thanks for the information ben. I've collected some more data on credit score calculation and like to share with you.

The above mentioned aspects are considered while calculating credit score according to a certain predefined weightage. Credit score determines borrower's credit-worthiness and creditors approve loan on the basis of credit score. Credit score is the yardstick to judge the risk associated with loan approval to a particular person from lender's perspective. So the facts that are most important in context of loan approval are given highest priority to calculate credit score-

• Timely payment – 35%
• Debt vs. Capacity – 30%
• Span of Credit History – 15%
• New accounts – 10%
• Types of Credit – 10%

Hence it's clear that the most important points are to be punctual on payments and keeping a balance between debt and capacity to score a good credit.

I am buying a new house I have already been approved and I don't need to sell the old one to close. I owe more that the old one is worth because of forclosures in my area. Paid 144,000.00 5 years ago and added 8000 in inporvedments and I am told it is worth 133,000 today and I owe 141,000. My present credit score is 811. How much will a short sale or deed in lieu hurt my credit.

[stanley]

Michael Freda,

Deed in lieu might make your report slightly better than Foreclosure; however, both are bad enough. In both the cases, your account will be reported as closed by creditor. The only favor that you get with deed in lieu is it reduces the ‘late period' as the process is faster than Foreclosure.

Deed in lieu excludes court procedures, attorney fees; it saves some time and helps you to avoid the mental strain. These are the reasons for you to go with deed in lieu; otherwise it is almost as ugly as Foreclosure.

I can see that there is a gap of 8000 that you should cover up if you go for short sale. Present valuation of the prop is 133,000 and you owe 141,000. Even though you sale it, you have to arrange that 8000, so that is the problem with short sale here.

However, people often suggest avoiding Foreclosure as it stays in your report for 7 years. Your score is already very good. So if you be attentive, you can rebuild your credit very soon.

That was all from my point of view. Hope some other forum members will put some more information here. Best of luck.