Your FICO score is one of the most important factors in your loan process.
Here are some FICO Facts you should know about:
A FICO score is a standardized ranking generated by the three credit reporting agencies, based on your credit history. To make the process fair for everyone involved, lenders use the the middle FICO score to determine which loans and rates you will qualify for. The formula used to compute these FICO score is not disclosed by the credit bureaus, per decisions made by the U.S. Congress. So none knows how its made up and what a consumer can do to enhance the score. But we do know some things you can do and they may work.
Simply put, the better your credit is, the higher your FICO score will be and that translates into cheaper loans. Currently, a minimum score of 620 enables you to get a conventional or FHA loan, and with a score of 740 and above, your loan pricing is at the best level. Conventional loans have a risk based chart based on your FICO score and your loan to value, so always check to see if there are any adjustments based on these two important numbers.
BEWARE: If your credit report is accessed, or "run", your FICO score can drop. This change in your score can drastically affect the type of the loan you qualify for, the cost of that loan, or even make your FICO so low that you no longer qualify for the loan you started out with! So be very careful about applying for credit cards or car loans if you are planning to buy a house in the near future.
It is possible to correct errors in your credit report, though it does take time and effort on your part. Call us to see how you can improve your FICO scores by using the Fair Credit Reporting Act.
At Loan Connectors, we understand that your FICO score is only one of the many important factors used to determine which loans you will qualify for. You may not have a 620 FICO scores but there may still be other options for you.
Contact us to find out how we can help you get the loan you want and guide you through the credit process.
