Understanding the Importance of Credit
A credit rating or FICO score is one of the most critical pieces of customer information when applying for a mortgage.
What is a credit rating or FICO score? The Fair Isaac Company (FICO) combines credit information and predictive analytics to forecast customer behavior via a FICO score. FICO gathers information from the three main credit repositories which are Equifax, Experian and TransUnion. This rating determines which products and interest rates can be offered. A credit rating is based on a credit report which collects information on:
Credit Report Management
Customers should review the report for errors and make corrections immediately. This is especially beneficial for customers seeking a loan.
Customers should know:
What is a credit rating or FICO score? The Fair Isaac Company (FICO) combines credit information and predictive analytics to forecast customer behavior via a FICO score. FICO gathers information from the three main credit repositories which are Equifax, Experian and TransUnion. This rating determines which products and interest rates can be offered. A credit rating is based on a credit report which collects information on:
- Debt Payment history
- Amounts owed v. amount available
- Length of credit history
- Age of credit
- Types of credit
- Excellent credit = 720 and above
- Good credit = 660 to 719
- Fair credit = 620 to 659
- Poor credit = 619 and below
Credit Report Management
Customers should review the report for errors and make corrections immediately. This is especially beneficial for customers seeking a loan.
Customers should know:
- Correct information can mean a better credit score
- Corrections can take time, for example, asking creditors for letters clarifying an error can delay the loan process.
- The credit agencies offer strategies and suggestions for increasing your credit score. i.e. keep balances low on credit cards