FICO tallies And How They sway You

Introduction

A FICO score is the credit score developed by Fair Isaac & Co. borrowing scoring. It is the method of determining likelihood that credit users will pay their bills. It helps lenders determine "risk" in granting you the loan.

 This method has become widely accepted by lenders as the reliable means of credit evaluation (Jaffe 87.). A credit score attempts to condense the borrower's credit history into the single number. equitable, Isaac & Co. and credit bureaus do not reveal how these scores are computed and The Federal Trade Commission has ruled this to be acceptable.

FICO Scores & How They Affect Credit Ratings

 Credit scores are calculated by using scoring models and mathematical tables that assign points for different pieces of information which best predict future credit performance (fico.com).

 Credit scores measure likelihood of default, so credit scores are generated using factors that have been found to predict credit risk. These factors are not weighted evenly and several minor instances may indicate the higher risk than one major, but isolated, credit problem.

Your credit score is single biggest factor in getting the new home loan. If your score is above 720, you can possibly qualify for the $1 million home with very little money down. If your score is below 500 and you have $1 million in bank, you may have trouble qualifying for this exact same home. Your interest rate will absolutely be unique.

Most lenders use your FICO score to determine whether or not you qualify for the home. It's such an important issue that you and your clients should understand basics of credit reporting system and many myths surrounding it.

Credit scores give lenders the fast, objective and impartial snapshot of the person's credit risk based on their credit history (Jaffe 87). That's why lenders use FICO borrowing scores when making borrowing conclusions. The higher ...