What is a FICO score and why should I care?
No matter what stage you are in life, a FICO score will be very important. Fair Isaac Corporation or FICO is the primary credit score used by lenders and creditors to determine if they approve a loan and what interest rate to give, basically, they want to know if you pay your bills on time. So, if you are looking to get approved on a mortgage, buying a new motorcycle, or want to add a shed to your property, this FICO score becomes pretty relevant.
The score ranges from 300 to 850 but in order to get approved with competitive rates try to keep your score above 620. This is especially crucial when it comes to real estate investing. Before you can get to the fun part of searching through real estate finding your dream investment, we must get approved for a loan in order to know what the budget is.
According to MyFICO, the following five categories are looked at to determine your score:
- Amounts Owed
- Payment History
- Length of Credit History
- Credit Mix
- New Credit
Keeping these in mind and in check will help you get the highest score and therefore the best interest rates and terms.
Got a great FICO score already? Contact me to get started on the next steps towards ownership.