FICO scores, your mortgage application and the bank!

 First of all, FICO stands for "Fair Isaac Company", which is the company that created and calculates a credit score.  There are other scoring systems, but FICO is the most widely used and trusted.

Your total FICO score consists of the sum of scores for different aspects of your credit history.
As I understand it, new credit accounts for 10% of your total score,  types of credit is 10%, payments
history accounts for about 35%, amount owed is about 30%, length of history is 15% 

There are variables to this, which depend on the amount owing on accounts, how long of a credit history that you have,  number accounts that are paid as agreed, how much credit is currently available to you, delinquent accounts- severity of those accounts, and the recency of good credit practice. 


A FICO score takes into consideration all of these categories of information, and the importance of any one depends  on the overall information in your credit report. Lenders will also look at income when determining whether or not they wil grant you a loan.  I see scores ranging anywhere from 500-825. You will usually need at least a 600 FICO score in order to obtain a loan, but there are companies that will work with you in the 500's.. Walk in the bank with an score of 800 or more, they'll probably beg you to work with them!

Now don't go out and get a credit report just to find out your FICO. Remember, every time you apply for credit, it becomes part of your overall scoring, and repeated attempts to obtain credit (even if you are a great candidate) will lower your FICO score. When you are ready to buy, we'll talk more!

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