March 19, 2009
What’s your credit score?
If you’re looking to finance your real estate purchase, one of the first things you need to know is your credit or FICO score.
According to Wikipedia,
“FICO is an acronym for Fair Isaac Corporation, founded in 1956 by engineer Bill Fair and mathematician Earl Isaac, to provide consulting services and enterprise decision management systems. They developed the FICO scores, a measure of credit risk, which are the most used credit scores in the world.”
The higher your score (on a scale of 400 to 900), the better your chances for qualifying for a mortgage, as well as getting the best rates.
But how is your FICO score determined?
35% - Payment History.
Make sure you pay your bills on time.
30% - Account Balances.
Some types of debt are better than others. In order of best to worst: Mortgage, student loan, installment loan, major credit cards, department store credit cards, finance company debt.
15% - Age of Credit.
Avoid opening several new accounts too quickly.
10% - New Credit.
Credit scores distinguish between search for a single loan and a search for multiple new loans. Multiple inquiries for a mortgage made within a 14 day window typically will not hurt your score.
10% - Mix of Credit.
Don’t open accounts just to have more credit available. Five open revolving accounts is probably optimal, indicating ability to get credit, while not being overextended.
Each of the three national credit bureaus provides your credit score, based upon their records, which may or may not be correct. Therefore, it is advisable to check your own scores; this will not hurt your score if requested directly through each bureau. The Fair Credit Reporting Act provides a process for disputing information you think is wrong.
The three reporting bureaus are:
Transunion
PO Box 2000
Chester, PA 19022
800-916-8800
www.transunion.com
Experian
PO Box 2104
Allen TX 75013
888-397-3742
www.experian.com
Equifax (CSC Credit Service)
PO Box 981221
El Paso, TX 79998-1221
800-759-5979
www.csc.com
For more information about credit scores, go to www.myfico.com.
For more information about buying or selling your home, contact me at jangio@keeferealestate.com, or 262/949-3570.
Let my expertise work for you!
Posted By: 
Janet Giovannetti
Tagged With:
credit score,
fico score
and qualifying for a mortgage
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