FICO – The First Step to Home Buying
Most people assume that the home buying process starts with getting pre-approved for a loan or with choosing a real estate agent. In reality, the home buying process starts with your finances. To realize your goal of owning a home, you must consider your FICO score along with the type of lender for which you’ll qualify.
The Fair Isaac Company calculates your FICO score on the summary of your total credit history. Most people traditionally have a score of 650, but scores range from 300 to 850. In recent years, however, some borrowers have seen their score drop by hundreds of points as a result of loss of employment, closed credit card accounts, or credit card accounts closed by the lender due to inactivity. Some of the factors in deciding your FICO score are:
When you apply for a mortgage or any other loan, lenders want to make sure that extending a loan to you isn’t a risk. Your credit score gives lenders a view of what type of borrower you’d be solely because of your credit history. You’ll need a score of at least 700 to get a decent interest rate. If your score is lower, you can still qualify for a loan, but the interest accumulated in the long run could be more than double the amount of someone having a near perfect credit score.
We’re used to working with all tiers of credit scores. Call us at 917-304-1212 and we can help you get on the right track to the home of your dreams.
There are plans to boost your score. Building your FICO score takes time. It can be difficult to make a large-scale change in your FICO score with small changes, but your score can improve in a few years by monitoring your credit report and by using credit extended to you to raise your score, instead of ruin it. The best way to do this is to know your FICO score. You’ll improve your credit score by using these pointers:
Knowing the ways you can build up your FICO score, you can move toward becoming a homeowner. Remember that when you’re ready to apply for a loan to purchase a house, you’ll want to keep your credit inquiries within a two-week window to avoid adverse effects on your credit score. With the help of KELLER WILLIAMS REALTY LANDMARK, the loan process can be a stress-free experience so you, too, can become a homeowner.
Learn more about FICO scores at myFICO.com, Fair Isaac’s informational site and review your credit history for free at annualcreditreport.com. And, for a small payment, you can get your FICO score from each bureau on their websites: equifax.com, experian.com and transunion.com.