Your FICO Score

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Sublime Financial in Dallas, Texas knows we all live in a computer-driven world. If you have been searching for a new home in Dallas, Texas or anywhere else in Texas, you've probably heard that your ability to repay virtually any loan comes down to one number. Credit reporting agencies use your history of paying loans in order to build your FICO score.

All three major credit agencies (Equifax, Experian and TransUnion) use a slightly different system to arrive at a score. Experian uses this model and calls its score FICO. Equifax's model, based on FICO, is called BEACON, while TransUnion, which also uses a slightly modified FICO, calls its score EMPIRICA. While each of the models considers a range of data available in your credit report, all of the agencies use the following to build your credit score:

  • Your Credit History - How many years have you had credit?
  • History of Payments - Do you pay your bills on time?
  • Your Credit Card Balances - How many credit card accounts do you hold, and how much do you owe?
  • Credit Inquiries - How many times have you had your credit checked for a loan?

These factors are weighted slightly differently depending on which formula the agency uses. Each formula produces a single number which may vary slightly by agency. FICO scores range from 300 to 850. Higher is always better. Most people getting a mortgage these days score 620 or above.

FICO Score Not Just For Qualifying Your Mortgage

Did you know? FICO scores are used for more than just determining whether or not you qualify for a mortgage here in Texas. Lenders give lower interest rates to individuals with higher scores. This can have an effect on the overall price you'll pay for your home mortgage here in Dallas and in Texas. 

Raising Your FICO Score

Unfortunately, there isn't a lot you can do to immediately improve your credit score. Since the score is entirely based on a lifetime of credit history, it's very difficult to significantly improve the score with quick fixes. You should, of course, remove any incorrect reporting from your credit report, which is the only way to quickly improve your credit score.

Know Your FICO

To raise your credit score, you've got to have the credit reports that are used to build it, and of course, you need the score itself. Fair Isaac, the corporation that offered the original FICO score, offers credit scores on its website: myFICO.com. For a reasonable fee, you can quickly get your FICO from all three reporting agencies, along with your credit report. Also available are helpful information and tools that help you analyze what actions might have the greatest impact on your FICO score.

You can get a free credit report once per year from the three major credit reporting agencies when you visit AnnualCreditReport.com

 

Curious about credit scores? Give us a call at 214-396-3650.

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