Scoring your Credit - How's your FICO
Living in a computer-driven society, your mortgage loan repayment hinges on a single credit score derived from years of bill payments—mortgage, car, and credit card bills—condensed into a singular indicator.
Three credit reporting agencies employ distinct formulas for credit scoring. FICO, developed by Fair Isaac and Company, is utilized by Experian (FICO score), Equifax (BEACON), and TransUnion (EMPIRICA), albeit with minor variations. Factors determining your score include credit history length, payment punctuality, credit card balances, and inquiry frequency, each assigned a weighted value.
Scores range from 300 to 850, with higher scores yielding lower interest rates. While immediate score improvement is limited, correcting inaccuracies in credit reports is essential. Obtain your FICO score and reports from all agencies via myFICO.com or get a free annual credit report from AnnualCreditReport.com.
Armed with this knowledge, you can make informed decisions and enhance your mortgage prospects. Questions? Call 408-626-1879.