How to Increase a Credit Score
Credit scores are one of the most significant factors lenders use to evaluate whether or not to lend money to a borrower.
When buying a home, few things are more vital than your credit score.
Credit scores are designed to measure the risk of someone defaulting by considering various factors in a person’s financial history.
If you are considering purchasing a Massachusetts home, one of the things you want to be sure of is the accuracy of your credit report.
One of the most popular mortgage questions among home buyers is what credit score is needed to buy a house.
You need good credit scores to get the best mortgage deal.
The Mortgage Industry Changed After The Last Real Estate Downturn
If you ask any mortgage broker, they will tell you that things have changed in the mortgage industry monthly. Due to the increase in foreclosures and short sales back years ago, lenders have increased their standards when evaluating the potential for default of every borrower.
One of the tools that lenders use to evaluate the borrower to repay a loan is what’s known as their FICO score. The Fair Issac Corporation developed the FICO score.
The company was founded in 1956, and its scoring programs are often used to assist lenders in managing credit accounts, detecting credit fraud, and automating lending decisions.
The FICO score is a standardized approach that helps lenders deliver decisions on loans in an efficient manner.
FICO scores range from 300 to 850, with 850 being the maximum possible score. According to the FICO scoring system, five factors determine a borrower’s score.
Using these guidelines can help you improve your credit score! Doing so will put you in a much better financial position to purchase a home.
Your Payment History
- 35% — A borrower’s payment history carries the most weight – Late payments on bills, including a mortgage, credit card, or automobile loan, can cause a consumer’s FICO score to decline….