Improve Your FICO Credit Score

Dated: 01/09/2018

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ImprImage titleove Your FICO Credit Score

Your "Fair, Isaac, and Company" aka "FICO" credit score is very important when applying for a mortgage, car, lease, credit card, job, plus more.

Those looking for a home should check their credit score before things get too serious. There’s nothing worse than learning that your credit report contains a late payment that can prevent you from buying a property.

For a loan application, these four factors are considered:

Employment/Income

Property

Assets/Down Payment

Credit/Debt FICO score

The higher your FICO credit score, the better. A score of at least 620 will give you a good chance to secure a home loan; 720 should qualify in most cases.

However, a lower score doesn’t mean you can’t finance a home. Credit repair begins with your credit report. You can request a free copy of your credit report annually from the Federal Trade Commission at AnnualCreditReport.com. Check it for errors.

Several factors contribute to a FICO credit score

35% is your payment history

30% is amount owed for each creditor

15% is length of your credit history with each creditor

10% is type of credit used (installments or revolving)

10% is new credit opened

50%=> owed on an individual creditor negatively effects credit

30%=> owed on an individual creditor positively effects credit

There are steps to fix negative marks:

If you’ve missed a payment: Call the creditor and ask to erase the negative listing. A well-documented letter can also help. There is no guarantee that a creditor will do this, but if you’ve been a good customer through the years, this method has proven to be successful.

If you have defaulted on a student loan: You can enter into a “rehab program,” which will get your account back on track after 12 months. It may not be the quick fix you need when buying a home, but the sooner the better.

For disputing a negative mark that was not your fault:Try disputing the account with the credit bureaus as “not mine.”

One way to boost your credit score is to have an older family member with a sound credit rating add you as an authorized user on a credit card. This can help increase your score. You don’t even need the card in your possession. With loans requiring higher credit scores, it’s never too early to start fixing credit challenges.


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Nancy Douglas

As a Realtor® & Certified New Construction Specialist, I assist consumers in the buying, selling, or leasing of properties in the Greater Austin area. ....

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