Tips for Improving Your FICO Score
Like it or not, your ability to get a good home loan is highly dependent on your FICO score. And, many people don't realize that a good FICO score has nothing to do with how much money you have. It is a measure of how well you handle credit and pay back those companies you borrow money from.
I once knew a very well-off young couple. They were newly married and ready to buy a home, but their FICO score was in the basement. Why? Because they had always paid cash for everything and never used any credit cards or loans. After spending a year building a credit history, they finally got a good FICO score, a good loan, and a lovely first home.
There are lots of great tips to improving your credit score, and everyone's needs are different. If you need to improve your FICO score, please give me a call and I will recommend several reliable mortgage brokers who know a lot about improving your credit profile.
But, in the meantime, here are several great tips that should apply to most people:
1. Get a copy of your credit report from all three credit bureaus and review it for accuracy. It is estimated that 60-70% of credit reports contain inaccuracies.
2. Pay your credit cards on time, every month, even if it is the minimum payment. Lenders are looking for a strong history of paying your debts in a timely manner.
3. Use your credit cards to build a profile, but don't max them out. Most advisors recommmend using just 25-40% of your credit limit. Lenders are looking for responsible use of credit.
4. Be patient. It can take 6-12 months to see a strong improvement in your credit score.
For a more complete look at your FICO score, visit the Fair Isaac MyFico.com website. And, feel free to contact me anytime to discuss FICO scores and lending. I can be reached at 510-547-5970 x57 or MSmartt@jps.net
There are lots of great tips to improving your credit score, and everyone's needs are different. If you need to improve your FICO score, please give me a call and I will recommend several reliable mortgage brokers who know a lot about improving your credit profile.
But, in the meantime, here are several great tips that should apply to most people:
1. Get a copy of your credit report from all three credit bureaus and review it for accuracy. It is estimated that 60-70% of credit reports contain inaccuracies.
2. Pay your credit cards on time, every month, even if it is the minimum payment. Lenders are looking for a strong history of paying your debts in a timely manner.
3. Use your credit cards to build a profile, but don't max them out. Most advisors recommmend using just 25-40% of your credit limit. Lenders are looking for responsible use of credit.
4. Be patient. It can take 6-12 months to see a strong improvement in your credit score.
For a more complete look at your FICO score, visit the Fair Isaac MyFico.com website. And, feel free to contact me anytime to discuss FICO scores and lending. I can be reached at 510-547-5970 x57 or MSmartt@jps.net
(photo courtesy of MyFico.com)
2 comments:
Hi Mary-
I'd like to point out that the only site that is endorsed by all three entities, and the FTC is
www.annualcreditreport.com
http://www.ftc.gov/bcp/conline/pubs/credit/freereports.shtm
http://www.patagoniafinance.com/2007/05/only-free-credit-report.html
Sorry about all the links. :(
Other than that - great post!
Mike
thanks for this post! can you also teach me how FICO works? thanks!
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