Who Has the Better Credit Score?
May 17, 2008
Post Tags: credit-scores , FICO
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This was a question posed:
“Which of these two have better credit scores on average — home buyers with higher or lower incomes?”
Great question, wonder why it took so long to ask it. The answer is:
“Inside the country’s fastest-growing home-mortgage program, the surprising answer is: People with lower incomes have slightly higher FICO scores. That finding, which emerged from a statistical analysis of all approved mortgages insured by the Federal Housing Administration (FHA) during fiscal 2007, is now buttressing a forthcoming major policy switch that could affect thousands of buyers and refinancers.”
What are the implication of these findings for the future?
Kenneth Harney “FHA’s shift to risk-based system of insurance is a fairer approach“
May 18th, 2008 at 11:21 pm
Wow, that’s certainly not what I would have expected.
May 19th, 2008 at 9:59 pm
That statistic is a little surprising to me. I wonder if it has something to do with debt to income ratio?
May 19th, 2008 at 10:08 pm
Mary,
It doesn’t surprise me at all. Maybe because I grew up in a lower income home. I know we watched every nickle and knew where every penny was spent. There were never any out of control credit card debts, or any debts for that matter.
People with higher incomes often find it easier to get in the mind set “They make more than enough” the end result they spend more than they make.