Back to Table of Contents

WHAT’S A FICO®?

What is a FICO® Score?

FICO® stands for Fair Isaac & Company and is the name for the most well known credit scoring system, used by Experian. The credit bureau’s computer evaluates a complete credit profile and assigns a score, which is used to estimate credit worthiness. Each of the three bureaus (Experian, Trans Union, Equifax) employs its own scoring system, so a given person will usually have 3 separate scores. Someone with a higher score will be viewed as a better risk than someone with a lower score. Typically, scores will range from about 600 to 700 or above, although some cases will be outside this range.

What Kind of Score Do I Need for a Home Loan?

There are as many answers to this question as there are loan programs available. Most lenders will take the average of all 3 scores to evaluate an application. Niche loans, such as Easy Qualifier and low down payment loans will have higher FICO® requirements.

How is My Score Determined?

The FICO® model has 5 main elements:

  1. Past payment history (about 35% of score) The fewer the late payments the better. Recent late payments will have a much greater impact than a very old Bankruptcy with perfect credit since.
    Myth - paying off cards with recent late payments will fix things. Payoffs do not affect payment history.
  2. Credit use (about 30% of score) Low balances across several cards is better than the same balance concentrated on a few cards used closer to maximums. Too many cards can bring down the score, but closing accounts can often do more harm than good if the entire profile is not considered. BE CAREFUL WHEN CLOSING ACCOUNTS!
  3. Length of credit history (15% of score) The longer accounts have been open the better for the score. Opening new accounts and closing seasoned accounts can bring down a score a great deal.
  4. Types of credit used (10% of score) Finance company accounts score lower than bank or department store accounts.
  5. Inquiries (10% of score) Multiple inquiries can be a risk if several cards are applied for or other accounts are close to maxed out. Multiple mortgage or car inquiries within a 14 day period are counted as one inquiry.

How Can I Raise My Score

Your score can only be changed by the way that item is reported directly to the credit bureaus (Experian, TU, Equifax). Written confirmation from the creditor is required. It is best to make these corrections before you try to purchase a home, because you can never be sure the exact impact a change will have on your score.

What Does This Mean to Me?

You should have your credit reviewed BEFORE you look for a home, and work with a PROFESSIONAL loan officer to make sure your loan is based on the most accurate information.

Back to Table of Contents
US:

Office: 520-463-2378
Fax: 520-463-2244

Susan Stewart-BROKER 
Home: 520-463-2976 
stewarts@queenvalleyproperties.com
 

 
Leslie Bryant- Assoc. Broker
Home: 480-253-6345
lesliebryant@queenvalleyproperties.com

Phyllis Joyce-Assoc. Broker
Home 520-463-2624
pmj.qv16@yahoo.com


Janine Gordon- Sales Agent  
Home: 602-228-8294
janine.gordon@queenvalleyproperties.com

Nancy Lamb-Sales Agent
480-907-9864

nancy@queenvalleyproperties.com

Kathy Shields
973-796-4389
kathyshields@queenvalleyproperties.com
agent photo

Testimonials

We had searched for 6 months on our own to find the perfect piece of acreage for our family to build on. After contacting Queen Valley Properties, we found our dream property within a couple weeks. We had never purchased raw land like this before so didn't know much about the process, thanks to their help we made it through and are now proud owners of 10 acres at the base of the Superstition Mountains!!! We go up to our parcel often and feel proud to own a piece of the beautiful Arizona desert. www.blakeslade.com www.blakeslade.com Jedd & Casi Johnson, Blake Slade Photographers
Thank you so much for taking the extra effort to make our first home purchase successful. You were there guiding us through all the crucial and important steps! You really listened to what we wanted in our home and you found exactly what we were looking for - at an amazing price! If we ever outgrow this home, we'll definitely be calling you! The Smith Family
View All