If you’re considering a mortgage loan in the near future, or for several other very important financial areas, credit score will be a vital piece of information. A measure of your past creditworthiness, credit score will impact everything from the mortgage rates you qualify for to certain programs you may not even be eligible for without the requisite number.
At Primary Residential Mortgage, our team is here to help with any credit score-related questions while we help you find the perfect home loan. One of the most common questions we get here is this: How is my credit score calculated to begin with? Let’s go over the important factors involved here, plus which ranges signal a good score and which are signs that you have some work to do.
For the remainder of this blog, we’ll be discussing FICO credit score – this stands for Fair Isaac Corporation, and it’s by far the most common such measure used by lenders. It’s been in use for coming up on three decades now. It takes information from each of the three major reporting agencies (Equifax, Experian and TransUnion) and uses it to help show lenders how much they can safely loan you and what interests rates they should ask for in return.
We should state up front that the exact formula for FICO credit score is proprietary and not publicly known. However, the group has publicized the basic factors and weights that go into their scores, which can be found here:
Here’s a basic primer on what your credit score, which can range from 300 to 850, means:
If you have any other questions about credit score or any of our mortgage services, speak to the staff at Primary Residential Mortgage in Cascade today.