A FICO Score is a three-digit number based on the information in your credit reports. It helps lenders determine how likely you are to repay a loan. For a mortgage, the FICO score is also a big factor in what interest rate you will be offered.
You can think of a FICO Score as a summary of your credit report. It measures how long you've had credit, how much credit you have, how much of your available credit is being used and if you've paid on time.
FICO Scores are calculated using many different pieces of credit data in your credit report. This data is grouped into five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%). The FICO score that a mortgage lender uses is not usually the same as one you may get on your own, through services like CreditKarma.
Your FICO Scores consider both positive and negative information in your credit report. Late payments will lower your FICO Scores, but establishing or re-establishing a good track record of making payments on time will raise your credit score.
If you'd like to learn more about your credit score, and what interest rates you could qualify for, let me know. I can help provide you with the information you'll need to get a low rate on your next mortgage.
