Mortgage Loan Understanding Fico Scores

Mortgage Loan Understanding Fico Scores



Mortgage Loan – Understanding FICO Scores
Apply for a​ mortgage loan and you’ll soon become familiar with FICO scores .​
Here’s a​ primer on​ the​ infamous FICO scoring process.
FICO scores are merely a​ mathematical representation of​ your credit record .​
Credit records are simply a​ recording of​ your debts and assets .​
Credit card balances,​ for instance,​ are a​ debt that appears on​ your credit record,​ as​ do late payments,​ bounced checks and so on​ .​
Credit,​ of​ course,​ is​ a​ huge consideration in​ the​ mortgage loan process .​
A credit score is​ a​ figure that represents an​ overall valuation of​ how you​ handle credit and the​ risk level associated with giving you​ more credit,​ to​ wit,​ a​ mortgage loan .​
The loan underwriter will review your credit report for items such as​ payment history on​ debts,​ debt balances and types of​ credit you​ already have .​
a​ summary of​ this information is​ represented by a​ figure known as​ you​ FICO score.
FICO
You may be surprised to​ learn that FICO doesn’t stand for any credit-related terms .​
Instead,​ it​ stands for Fair,​ Isaac and Company .​
This company developed the​ mathematical formula that produces the​ much loved or​ hated FICO scores .​
The FICO score assigned to​ you​ determines whether you​ love or​ hate the​ formula .​
FICO scores come in​ a​ range of​ three digit numbers .​
The lowest FICO score you​ can get is​ 350 .​
The highest FICO score is​ 850,​ a​ score for which bankers will bow at​ your feet .​
The higher your score,​ the​ better your credit situation and the​ more likely a​ bank is​ to​ provide you​ with a​ mortgage loan .​
Most people do not have perfect credit .​
To this end,​ we find most people have FICO scores ranging from the​ low 600s to​ the​ high 700s .​
Mortgage applications typically are not rejected because of​ a​ few late payments .​
If you’re considering purchasing a​ house,​ you​ should always try to​ pre-qualify for a​ mortgage loan .​
Getting a​ reading of​ your FICO score should be one of​ the​ first steps.




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