How’s Your Score?
Choosing a lender to finance your home isn’t the first step in becoming a homeowner. To realize your goal of owning your own home, you need to look at your FICO score as well as the type of loan you will qualify for.
The Fair Isaac Company calculates your FICO score on the summary of your complete credit history. The score ranges from 300 to 850, with the average score around 600.
Factors used in determining your FICO score include:
In reviewing your credit history, you will find that you will have three reports, Experian, Equifax, and TransUnion -three of the major credit reporting agencies. These credit agencies use different models to calculate your credit rating. FICO is used by Experian, Equifax’s model is called BEACON, and TransUnion uses EMPIRICA. As a result, you will have three scores, one for each bureau.
When you apply for a mortgage or any other loan, lenders want to make sure that extending a loan to you isn’t risky. Your FICO score gives lenders a view of what type of borrower you are based on your credit history. Most home buyers should have scores in the range of 740 or higher to get a decent interest rate. If you score is less than that, you can still qualify for a loan, but the interest paid over the life of the loan could be higher than someone with a superior credit score.
Getting your credit in order is the first step in purchasing a home. You want a better score, but don’t know how to get there? Building a FICO score takes time. It can be difficult to make a change in your number with a few small changes, but your score can improve in a few years by keeping taps on your credit report and by using credit extended to you to raise your score. The most important things is to know your FICO score.
Here are some methods to help you to improve your credit score:
Knowing the methods you can use to improve your credit score, can help you move toward becoming a homeowner. When applying for a loan to purchase your home, you will want to keep your lender applications within a two-week period to avoid adverse effects on your credit score. With the help of Revolution Realty, shopping for a mortgage can be a stress-free experience. Contact us at email@example.com or (504) 309-7224.