Your FICO Score

The FICO scores, developed by Fair, Isaac (the pioneer in credit scoring) is a range from 300 to 850 that lenders use to determine your credit rating. A FICO score is a snapshot of your credit rating at a particular point in time. The higher your score the more likely you are to be approved for loans and receive favorable rates.

More than 70% of the largest financial institutions use FICO scores to make billions of credit decisions each year, including more than 75% of mortgage origination's.

Your credit score will tell you which factors in your profile most affect your credit score and therefore your credit rating. The five most considered in this calculation of your credit score listed from the most important are:

Payment History
Amount Owed
Length of Credit History
New Credit
Types of Credit in Use

If you have a less than excellent credit rating, you are not alone. Many Americans damaged their credit rating by missing payments, carrying high balances and from inexperience, illness or unemployment, over extend themselves.

It will take time, but you can improve your credit rating.

Improving Your Credit Score

Look at your credit report, and review the 5 items reviewed at arriving at your score. Determine where your problem areas are. Next, lock away your credit cards. Don't cancel them because if your credit rating is low, you may have trouble getting new cards. But don't use them. Right now you need to pay down your debt, not increase it.

Create a plan based on the analysis of your credit score to take actions that will change your credit rating over time. Since payment history is the most important factor in your credit rating, the first order of business is to pay your bills on time. Pay at least the minimum balance on each bill within 30 days.

Talk to your pre-qualifying Lender for credit counseling. Stay away from so-called Credit-Repair clinics. Avoid companies that guarantee to remove late payments or bankruptcies from your report or that prompt you to pay for their services immediately. Only you can fix your credit rating.

The final step is to keep at it. The longer you exhibit good credit behavior by paying your bills on time and managing your credit wisely, the more your credit rating will improve until you once again achieve a favorable credit rating.

To contact all 3 credit reporting agencies, call the following numbers:

Equifax 800-525-6285
Experian 888-397-3742
Trans Union 800-680-7289

Equal Housing Mortgage Lenders BK0905081

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