The three major sources of credit information about consumers are Equifax, Trans Union, and Experian. Lenders will obtain your credit record from all three of these credit bureaus. The lender will evaluate this information to determine whether or not you are likely to repay the mortgage loan in a timely fashion.

How does the mortgage lender evaluate the information in the

credit report? One way is through credit scoring.

What is a credit score? A credit bureau score, is one of many pieces of information that the lender will use when evaluating a mortgage loan application. A credit score is a summary of a borrower’s credit report and a numerical measurement that reflects a borrower’s management of credit. Your credit score is based on the records compiled by credit bureaus and includes the information reported each month by your creditors, such as the amount of existing credit you have and your payment history. A credit score considers all of the information in the credit report and converts this information into a number that helps the lender determine the likelihood that you will repay your loan on time. 00 is the lowest possible score, 900 is the highest. 680 to 700 is considered excellent, and less than 620 is typically considered sub-rime, though if there are errors on the report, this would be considered.

Credit scoring is an objective process, based only on the infor¬mation in your credit report. Factors such as age, race, religion, gender, national origin, marital status, your income, employment, and where you live are not considered in determining your credit score.

Is credit scoring new? Banks and other lenders have used credit scoring for over 30 years for credit cards and other types of consumer loans, such as automobile and home equity loans. Now, credit scoring is being used in mortgage lending.

Why is credit scores used? Lenders want to extend credit to people who will pay them back, and pay them back on time. They also want to be objective in making lending decisions. In order to approve your application for a mortgage loan, your lender must evaluate and understand many different risk factors, including your ability to repay the debt as well as how you have managed credit in the past. Because borrowers’ credit histories can range from being very simple to being very complex, it is sometimes difficult to determine whether a given credit history is acceptable or unacceptable, or whether certain information represents a strength or a weakness.

By using credit scoring, a lender can quickly and objectively evaluate your credit history in a consistent manner, and determine the likeli¬hood that you will repay the loan as agreed. The use of credit scores not only improves the accuracy of the analysis of your credit history, but does so in a way that enhances the efficiency and consistency of the underwriting process.

How does a lender get my credit score? When you apply for your mortgage loan, you will give your lender permission to check your credit history with the various credit bureaus. More than likely, the lender will obtain your files from the major credit bureaus: Equifax, Trans Union, and Experian. In addi¬tion to obtaining a credit report, the lender will also request a credit score. Your score is calculated by the credit bureau — not your lender — and is based only on the information contained in each of the credit bureau’s files.

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Desperate times call for desperate measures, and the Chancellor’s Pre-Budget Report (PBR) delivered recently could herald a new era of co-operation between the Government and the construction industry. The PBR announced that £3billion worth of investment that was due to be carried out in 2010-11 is to be brought forward – news that has been welcomed by the Civil Engineering Contractors Association (CECA). Some of that investment will go towards road projects, flood defence schemes and the necessary infrastructure for new social housing projects also announced in the PBR.

In addition to this injection of capital into construction projects, Chancellor Alistair Darling also announced a raft of initiatives designed to take the pressure off small and medium sized companies, including temporary rate relief on some properties and the relaxation of tax payment periods for struggling companies. The aim of the PBR was to stabilize a shaky economy and get businesses moving again, particularly in the battered and bruised construction industry.

The announcement was roundly welcomed by the leading construction organizations, which see the plan as an attempt to give a little more breathing space to an industry that has been savaged by the economic downturn. Many companies also see the Government’s plans as good news for jobs in construction and engineering, motivating the market out of stagnation and back into active recruitment and gearing up for the mother of all fightbacks.

Recruiters will now be able to breathe a little easier as the Chancellor gives them the room they need to spread their tax obligations (including corporation tax, VAT, national insurance and income tax) across monthly installments rather than making large, one-off payments. This means that companies have more floating capital to invest in recruitment and projects that, a few months ago, looked as if they were at risk of being completely mothballed. The plans also allow recruiters to offset losses against profits from the last three years, rather than only the previous year as before. This means that if 2009 turns into the recession that everyone is predicting, recruitment firms will be able to claim a tax rebate, giving them more capital to invest in filling high level construction jobs.

This all bodes well for those looking for jobs in construction or engineering jobs, as a more stable construction industry is better able to bend and flex to market influences. The overall investment cited by the Government is a huge £20billion. Combined with a cut in the VAT rate to 15% and the £3billion spend on infrastructure, it seems that for the first time in a very long period the Government is looking to invest substantially in UK PLC. The CECA itself has drawn up a ten-point plan to keep the construction industry out of recession and the Chancellor’s PBR certainly seems to have addressed some of the concerns they raise. The CECA hopes that the fast-tracking of infrastructure projects such as Crossrail, Olympics-related developments and various road projects will mean that jobs in construction are secured for the foreseeable future. They also hope that projects already in an advanced stage of design will be brought forward, boosting the job market further.

This flurry of activity has been perfectly timed, according to experts in the industry. Without this investment in the UK’s infrastructure – investment that has long been fought for and is needed – the economic slowdown could have led to hundreds of thousands of jobs being lost throughout construction, engineering and the outlying businesses that service the sector. This doesn’t just have implications for the UK economy, but for global prospects too. The UK seems to be setting a precedent in tackling the effects of a worldwide economic crisis, and for the first time in many years, where the UK leads, the rest of Europe and the USA seems to be following. The readjustment of exchange rates will make imports and exports more viable on an international market, again helping to stabilize company’s order books. This stabilization, despite companies having to tighten their belts in the short term, should bode well for the economy post-2009. With the PBR announcements, the construction industry at last has a fighting chance of weathering the economic storm and securing construction jobs for the future.