About Your FICO Score & General Credit
How it Effects You, & Your Loan Decisions
A FICO score is a credit score developed by Fair Isaac & Co.
Mortgage bankers use your credit score to determine how credit worthy you are for a mortgage loan.
All lenders use credit to determine your eligibility for a home loan.
If you're unsure about your credit score, please check these websites to determine it right away
Credit scores are determined by the following fiscal factors:
- Have you had any late payments with any credit vendors?
- How much credit have you already established?
- How long have you lived at your current residence?
- Have you had an bankruptcies or problems with collections?
Things you can do to improve your credit
- Pay your bills on time. Late payments and collections can have a serious impact on your score.
- It can be a good thing to actively use your credit cards as long as you pay off their balances on a timely fashion
- Never miss payments
- Don't apply for credit too frequently, this can damage your reputation when you have a lot of inquiries
- Reduce your credit-card balance as much as possible, put as much cash equity as you can on your credit lines
Make sure to consider all of your loan options...
Not all loan types require rigidly high credit scores!
Unlike Private Mortgage Insurance, which accounts for 80% of US mortgages,
the government insures FHA loans so that you can still find a low cost mortgage
if you are on the flip side of this ratio.
In an analysis by Freddie Mac
If you're credit score is above a 680, this is considered adequate, but if you happen to fall below this standard limit, there are still a lot of options for FHA loans.
Federal Housing Administration loans accounts for 20% of US mortgages,
the government insures FHA loans so that you can still find an affordable home mortgage.
In most cases when your FICO score is below 620, it may be very hard to obtain a loan,
and that loan may not necessarily be easily available unless your FICO score is above 680.
This is why FHA loans are designed to help low income households apply for home loans.
To learn more about FHA loans, please click here for more information!
|
