Raise your FICO score  to buy a place in Frisco with Jeanie Elliott Inc. REALTORS, ABR, ALHS, CHMS, SRES, SFR, BPOR, M.S. BUSINESS as your real estate agent - 972-612-2277  (Direct)

First-Time Buyer's Guide to Better Credit

Most people assume that the home buying process starts with getting pre-approved by a lender or with choosing a real estate agent. The content of your wallet starts the home buying process. Saving your money for a down payment is a good idea, but if you don't have an acceptable credit score to back it up, you could find yourself renting for another couple of years in Frisco, Texas until you improve your score.

A FICO score is a collection of your years of credit history based on an instrument developed by Fair Isaac and Company. Most people traditionally have a score of 600, but scores are tiered from 300 to 850. Job loss has been common in the last few years, but FICO scores aren't necessarily adjusted "on a curve." A low score is just that and often means you can't get a loan. Some of the pieces in deciding your FICO score are:

  • Credit Inquiries — Do you have too many open accounts?
  • Types of Credit — Do you have a healthy mix of loans and credit cards?
  • Payment History — Do you pay your bills on time every month?
  • Credit to Debt Ratio — How much do you owe versus how much credit you have available?

When you pull your credit report, you'll find that you actually have three reports. Experian, Equifax and TransUnion — three of the major credit reporting agencies — use a slightly different systems to determine your credit rating. FICO is used by Experian. Equifax's model is called BEACON and TransUnion uses EMPIRICA. You have a credit score with all three of the bureaus.

When you apply for a mortgage or any other loan, lenders want to make sure that extending a loan to you isn't a problem. Your credit score gives lenders an insight into what type of borrower you'd be based solely on your credit history. Because of the shift in the economy, most home buyers should have scores in the range of 740 or higher to get a satisfactory interest rate. If your score is less than that, you can still qualify for a loan, but the interest accrued over time could be more than double that of an individual having a better FICO score.

We're used to working with all levels of FICO scores. Contact me and I can help you get on the right track to the home of your dreams.

How do you boost your credit score? Building your FICO score takes time. It can be hard to make a significant change in your number with quick fixes, but your score can improve in a year or two by monitoring your credit report and by using credit extended to you to raise your score, instead of ruin it. The most important thing is to know your FICO score. You'll improve your credit score by using these tips:

    Raise your FICO score  to buy a house in Frisco with Jeanie Elliott Inc. REALTORS, ABR, ALHS, CHMS, SRES, SFR, BPOR, M.S. BUSINESS as your real estate agent - 972-612-2277  (Direct)
  • Even out your debt. At first, this doesn't sound like a good idea. But, you don't want to have one card that is at the maximum and have your remaining cards at a zero balance. It's better to have each of your cards at about less than 40% of their credit limit than to have all of your debt transferred to one card.


  • Store cards and gas cards. For those who have non-existent credit or low credit, store credit cards and gas credit cards are ways to improve credit, increase your spending limits and have a solid payment history, which will raise your FICO score. You should always avoid charging a large balance for too long because these types of cards normally have a surprising interest rate.


  • Keep your cards in rotation. Whether you're just getting started with credit, or if you've got older cards, be sure to use your cards to make sure your accounts stay active. But, make sure you pay them off in no more than two or three payments.


  • Stay on top of payments. Payment history is a huge factor in your credit score. It's one of the reasons people who have recently been unemployed see the biggest dip in their credit score. Yes, it takes longer to rebuild your credit with payment history, but it's the surest way to prove that you're able to make payments to a bank.


  • Correct your credit report. If you find mistakes on your credit report, contact the bureau asking that the item be removed. If you have a common name or the same name as a family member, you'll want to pay extra attention to make sure the activity reported is correct.


Knowing the ways you can improve your FICO score, you're one step closer to becoming a homeowner. Know that when you're ready to apply for a loan to purchase a house, you'll want to keep your lender applications within a two-week window to avoid a negative mark on your credit score. With the help of Jeanie Elliott Inc. REALTORS, ABR, ALHS, CHMS, SRES, SFR, BPOR, M.S. BUSINESS, the loan application process is sure to go more smoothly so you, too, can become a homeowner.

To learn more, visit www.myFICO.com, Fair Isaac's informational site and you can review all of your credit reports for free each year at www.annualcreditreport.com. And, for a small payment, you can get your FICO score from each bureau on their websites: www.equifax.com, www.experian.com and www.transunion.com.

I work with all levels of FICO scores and can help you settle into home ownership with the best lending insitution for you. E-mail me at jeanieelliott@earthlink.net or call 972-612-2277 (Direct) for more information.

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