When getting a mortgage loan, credit card, a line of credit or when borrowing money in another way, your FICO score will have a major impact on the interest rate and how much the lender is willing to let you borrow. So how do you improve your FICO score? California lending professional and loan officer Sonia Krietz will discuss tips to improve your FICO score in today’s article.
What is a FICO Score?
The term “FICO” is an acronym, referring to the Fair Isaac Corporation. The Fair Isaac Corporation is the company that originally devised the FICO scoring system in 1989.
Your FICO score, which ranges from 300 (poor) to 850 (excellent) is a compilation of credit scores from the three major U.S.-based credit reporting bureaus: Equifax, TransUnion and Experian.
Your FICO score is determined by pulling data from all three major national credit bureaus, taking nearly 50 different score figures into account. As a result, this score is viewed as a rather objective and balanced scoring system.
How to Improve Your FICO Score
There are a number of things you can do to improve your FICO score. The most important is to pay your bills on time. Timely payments are very important and once your account goes into collections, it will remain on your credit history for seven years. The more timely your payments are, the better your FICO score will be.
Also, work to keep your credit card balances low. High balances on your credit cards and other revolving credit will ding your FICO score, which evaluates how much debt you have relative to your credit limits. Ideally, balances should be below 25% of the credit limit.
Don’t open credit card accounts or other credit lines that you don’t need. New accounts will lower the average time you’ve had credit accounts established, which can have a significant impact on your score if you don’t have a lot of other credit information on your credit report. Even if you have a lengthy credit history, opening a new account can still lower your score.
Consumers should also avoid opening lots of new lines of credit in a short period of time. Many also run into trouble when shopping for a loan. If multiple lenders to request your credit report, it can lower your credit rating. Another potential problem area involves frequent inquiries for multiple types of credit and loans. This can indicate a borrower who’s a higher risk to lenders.
Let Loan Officer Sonia Krietz Help With Your Mortgage Loan
If you’re ready to get a home loan, wish to refinance a mortgage or need help with credit repair services before you obtain a new loan, contact lending professional and loan officer Sonia Krietz, with Security National Mortgage Company. In addition to offering mortgage loan lending services, Sonia can also guide you through the process of repairing your credit and maximizing your FICO score so you can increase your chances of not only getting approved for a mortgage, but you may also be eligible for a lower interest rate!
Readers may also wish to learn more about the difference between pre-qualification and pre-approval for a mortgage loan, along with what factors impact interest rates.
Also be sure to read Sonia’s related article to learn more about home loan refinancing and how refinancing works.
You may wish to complete the pre-application form and Sonia will be in touch to help you proceed through the process. If you have any questions or concerns, you can also contact Sonia Krietz by phone at 916.385.9716.