To qualify for a good loan, you have to have a fairly solid credit rating. More specifically, though, lenders will want to take a look at your FICO credit score report. What exactly is a FICO score and how does it differ from your conventional score?
FICO Credit Score Defined
The Fair Isaac and Company (FICO) was an organization established in 1989. It developed a system for determining one’s credit score. Today, the system is used by most major banks and institutions when determining a home buyer’s eligibility for loans. Basically, the system gathers data from credit reporting agencies. Then it applies a specifial algorithm to calculate a final score.
Aside from mortgage loans, Banks also use FICO scores to determine someone’s eligibility when opening a savings or checking account.
For the most part, home buyers don’t need to concern themselves with the particular algorithm. It’s best to just think of a FICO score as more or less the same as your credit score. By raising the latter you will automatically raise the former.
Our real estate planners suggest not getting caught up in the terminologies, but to focus on maintaining a solid score. Scores range from 300 to 850. Higher scores are better. To keep your score on the higher end, adhere to these rules:
- Always pay your bills on time
- Only apply for the credit you need and no more
- Don’t use all of the credit available to you
- Each year, obtain a credit report and review it with your real estate lawyer. Your attorney can help dispute any errors
We’ll Help You Sort Out Your FICO Score
Call Curtis & Casteel Law Group before applying for a loan. Our attorneys are versed in the areas of real estate and bankruptcy among others. We’ll make sure your FICO credit score is satisfactory enough to help you qualify for a mortgage.
Edited by Justin Vorhees
Real Estate Consulting for Home Buyers
Proudly serving the people of south Snohomish County, north King County, and the Greater Seattle area