Making your wish for a dream house come true is now even more attainable these days. There now real estate loans and mortgage programs that are being offered in the market. Getting your credit loans approved is the first step to make your dreams a reality.
What Is A FICO Score?
The FICO score is the most popular and well-known credit score. It was in 1970, that Fair Isaac Corporation introduced the formula for the FICO score. It was not an easy feat for the founders, mathematician Earl Isaac and Engineer Bill Fair, to come up with formula and it took them 12 years to finalize it.
The actual FICO formula includes the individual's borrowing history, length of credit history, punctuality of payment, and types of credit used. The FICO score is a simple three-digit number summarizing pages of lengthy credit history. The FICO score ranges from 350 to 850. But what does this numbers mean? If you will really look into it, having a high FICO score means the more creditworthy the individual is. On the average, a score of 720 or higher is considered good.
If you want to get a higher credit score then you should also know that terms of your loans could affect your FICO score. Opting for short-term loans will not get you a higher score but if you will go for long-term loans then you will be amazed on its positive effect to your credit score. But you also have to make sure that you have a good credit history. A single unpaid loan can definitely mar your good credit standing forever.
Improving Your Credit And Starting Clean
Your credit history plays a big part in securing your dream house. In securing finances or mortgage loans for your house, be ready to be investigated. The financing institutions and even government entities will check your credit records and other income-related activities such as job loss and expenditures. To make sure that you will have a higher credit standing you have change all the negative indications in your credit history.
Having a good credit score will be more advantageous on your part. You can easily get finances for all your needs. Obtaining a new credit card, getting better insurance rates, and even finding better employment becomes attainable when you have a high FICO score.
Now going back to getting that dream house, when applying for a mortgage loan your credit score actually helps determine the interest rate you will need to pay. This means that if you have a low credit score then that would be equivalent to higher interest rates. However, if you start making steps to ensure a higher credit score then you can possibly enjoy lower interest rates later on.
At this point, you have to double-check your credit score. You can get credit reports with certain bureaus but these reports do not actually include your FICO score. It is advisable that one should check their FICO score at once a year to ensure that it is accurate. You can check your actual FICO score online. However, you will need to pay charges or one-time fees to avail of these services. With these tools, you can check the movement of your FICO score and credit monitoring plans to keep your credit score on track.
Now, you have an idea on how to improve your credit score to avail of that mortgage. All you have to do is ensure that everything will go along as you planned. Getting assistance will be more to your advantage. Just check out what other resources is available for you.