Your FICO Score

Your Credit Score:

Choosing a lender isn't the first step in becoming a homeowner. In reality, the home buying process starts and ends with your finances. To become a homeowner, you must consider your FICO score along with the type of mortgage loan for which you'll qualify to buy a home in Orlando and Central Florida.

The Fair Isaac Company bases your FICO score on the summary of your total credit history. The score ranges from 300 to 850, with most people normally having a score of 600. With the change in the economy, however, some borrowers have seen their score drop dramatically after underemployment, delinquent credit card accounts, or credit card accounts closed by the lender due to inactivity. Some of the factors in calculating your FICO score include:<p>

Credit to Debt Ratio — How much do you owe versus your available credit?

Credit Inquiries — Do you have too many open accounts?

Types of Credit — Do you have a healthy mix of loans and credit cards?

Payment History — How many months do you make late payments?

In reviewing your credit history, you'll see that you actually have three reports. Experian, Equifax and TransUnion — three of the major credit reporting agencies — use a slightly different system to determine your credit rating. FICO is used by Experian. Equifax's model is called BEACON and TransUnion uses EMPIRICA. You have a credit score with each of the bureaus.

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 insight into what type of borrower you'll be based solely on your credit history. Because of the shift in the economy, most home buyers should have scores in the range of 700 or higher to get a decent interest rate. You can qualify for a mortgage loan with a lower score, but the interest accrued over the life of the loan could be more than double the amount of an individual having a higher FICO score.

At Sue King, Realtor® at Greater Orlando Realty USA, Inc. we are used to working with all levels of credit scores. Call us at (407) 492-9353 and we can help you get on the right track to the home of your dreams.

You want a higher score, but how do you get it?

Improving your FICO score takes time. It can be difficult to make a significant change in your FICO score with small changes, but your score can improve in a year by monitoring your credit report and by wisely using credit.

The most important thing is to know your FICO score. You'll improve your credit score by using these helpful hints:

Raise your FICO score to buy a property with Greater Orlando Realty USA, Inc as your real estate professionals - 407-774-9858 Retail cards and service station cards.

For those who have no credit or below average credit, store credit cards and gas credit cards are ways to obtain credit, increase your credit limits, and have a solid payment history, which will raise your FICO score.

You should always avoid carrying a large balance for more than a couple of months because these types of cards more than likely have a larger interest rate.

Don't let your cards get dusty. Whether you have older cards, or are just getting started with credit, be sure to use your cards so that your accounts maintain an active status. But, be sure to pay them off in one or two payments.

Stay on top of payments. Payment history is a huge factor in your credit score. It's where people who have recently been unemployed see the biggest hit in their credit score. Yes, it takes longer to restore your credit with payment history, but it's the most reliable way to prove that you're able to make payments to a lender.

Correct your credit report. If you find incorrect items on your credit report, contact the bureau asking that the item be removed. If you have a common name or the same name as a family member, you'll want to give extra care to make sure the activity reported is correct.

Spread your debt around. At first, this doesn't sound like a good idea. But, you want to avoid of having one card that is at the maximum and have the rest of your cards at a zero balance. It's better to have each of your cards at about 20% of their credit limit than to have the bulk of your debt sitting on a single card.

Knowing the methods you can use to build your credit 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 lender applications within a two-week window to avoid a negative mark on your credit score. With the help of Greater Orlando Realty USA, Inc, the loan process is sure to go more smoothly so you, too, can achieve home ownership.

Learn more about FICO scores at www.myFICO.com, Fair Isaac's informational site and once per year, for free, you can review all three of your credit reports at www.annualcreditreport.com. And, for a small payment, you can get your FICO score from each bureau on their websites: www.equifax.com, www.experian.com and www.transunion.com.

We work with all levels of credit and can help you step into home ownership with the best mortgage lender for you.