How Can I Improve My Credit Score - Starting Today?
FICO credit scores are important for a variety of reasons, but they are especially important for people who are planning to buy a home. So it's no surprise that one of the most common questions among home buyers is - How can I improve my credit score before buying a home?
We will answer this question in a moment. But first, let's address another important question on the subject:
What is a FICO Credit Score in the First Place?
FICO stands for Fair Isaac Corporation, and they are the folks who developed the credit scoring model that is in use today. The terms credit score and FICO score mean essentially the same thing. When you apply for a mortgage loan for a new home, the mortgage lender(s) will review your FICO score to determine how comfortable they are loaning you money.
Your credit history determines the FICO score you receive. How you have "behaved" in the past from a financial standpoint will be reflected in your credit score. You can learn more about the various factors that influence your FICO score by visiting www.myfico.com.
Many people don't realize it, but you actually have three FICO credit scores -- one for each of the three credit-reporting bureaus (Experian, TransUnion, and Equifax). Mortgage lenders will typically look at all three scores from all three bureaus to get a composite / overall score.
How Do I Obtain My FICO Score?
So now that you have a better understanding of what this score is, the next question is how you go about obtaining your credit score. As you may have surmised by surfing the web lately, there are a lot of websites with free credit report offers (with scores). But the Internet can be a scary place, as well as being helpful. Unfortunately, there are a lot of shady websites out there that harvest personal information for criminal purposes.
So the key is to get your FICO score from a trustworthy website. Here's one that we recommend:
Now let's move on to the next part of this discussion to answer that burning question you have -- How can I improve my FICO credit score before applying for a mortgage loan?
Tips for Improving Your Score
The key to improving your credit score is to correct whatever financial behavior led to the bad score in the first place.
For example, if your debt-to-income ratio is unfavorable, you should consider paying down some of the debt. If you can increase your income at the same time ... even better. But start by paying down some of your debt (such as credit card balances). This will give you a more favorable debt-to-income ratio, which is one of the factors lenders look at when approving people for loans.
You should also make it a point to pay all bills on time. The number of times you miss payments (such as car payments, credit card payments, etc.) will affect your FICO credit score -- as will the degree of delinquency, meaning the length of time the payments are past due.
For more tips on improving your credit score before buying a home, check out this helpful article.
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Get more home buying advice at HomeBuyingInstitute.com
======================================Labels: Credit scores
We will answer this question in a moment. But first, let's address another important question on the subject:
What is a FICO Credit Score in the First Place?
FICO stands for Fair Isaac Corporation, and they are the folks who developed the credit scoring model that is in use today. The terms credit score and FICO score mean essentially the same thing. When you apply for a mortgage loan for a new home, the mortgage lender(s) will review your FICO score to determine how comfortable they are loaning you money.Your credit history determines the FICO score you receive. How you have "behaved" in the past from a financial standpoint will be reflected in your credit score. You can learn more about the various factors that influence your FICO score by visiting www.myfico.com.
Many people don't realize it, but you actually have three FICO credit scores -- one for each of the three credit-reporting bureaus (Experian, TransUnion, and Equifax). Mortgage lenders will typically look at all three scores from all three bureaus to get a composite / overall score.
How Do I Obtain My FICO Score?
So now that you have a better understanding of what this score is, the next question is how you go about obtaining your credit score. As you may have surmised by surfing the web lately, there are a lot of websites with free credit report offers (with scores). But the Internet can be a scary place, as well as being helpful. Unfortunately, there are a lot of shady websites out there that harvest personal information for criminal purposes.So the key is to get your FICO score from a trustworthy website. Here's one that we recommend:
Now let's move on to the next part of this discussion to answer that burning question you have -- How can I improve my FICO credit score before applying for a mortgage loan?
Tips for Improving Your Score
The key to improving your credit score is to correct whatever financial behavior led to the bad score in the first place.For example, if your debt-to-income ratio is unfavorable, you should consider paying down some of the debt. If you can increase your income at the same time ... even better. But start by paying down some of your debt (such as credit card balances). This will give you a more favorable debt-to-income ratio, which is one of the factors lenders look at when approving people for loans.
You should also make it a point to pay all bills on time. The number of times you miss payments (such as car payments, credit card payments, etc.) will affect your FICO credit score -- as will the degree of delinquency, meaning the length of time the payments are past due.
For more tips on improving your credit score before buying a home, check out this helpful article.
======================================
Get more home buying advice at HomeBuyingInstitute.com
======================================
Labels: Credit scores
posted by Brandon at
10:57 AM
