A Primer on Your Credit Score
When you apply for a loan – mortgage, car, or credit card – the lender will want to take a peek at your financial information, and that includes your credit score. This magical number indicates the likelihood that you will be able to pay back any money you borrowed.
Actually, your credit score isn’t a magical number, although it could seem like it. It is determined using a number of weighted factors.
There are several credit reporting companies who can dish out your credit score and your related financial information. Maybe you have heard of them? Equifax, Experian, and TransUnion are the big fishes. Although each has their own confidential algorithm, generally the credit score from each will be roughly in the same ballpark.
What About FICO?
When talking about credit scores, you may have heard the abbreviation FICO floating around. FICO, once known as the Fair Isaac Corporation, is a credit scoring model. What happens is that the three credit reporting bureaus – Equifax, Experian, and TransUnion – provide their version of your financial details to FICO, who then uses that information to come up with your credit score.
While there are other credit scoring models lurking out there, FICO tends to be the one most widely used.
Lay It On Me – Tell Me the Credit Score Range
If you have ever had credit in any form, usually starting out as a credit card, then you will have a credit score. But here’s the thing – your credit report isn’t simply just about the loans you pay. In fact, your credit report contains all sorts of information, including your current and previous mailing addresses, places of employment, your utility payments, and of course, details about any loans or credit cards you have. These details are used in calculating your credit score.
Credit report: A detailed record of your credit history, which includes your mailing addresses, employment history, utility payments, and loan payments.
The following is a list of each FICO credit score range and how each one can affect you financially when hoping for a mortgage:
Now, if some of the ranges seem daunting, keep in mind that only 1 person out of about 1300 has a credit score greater than 800. Yet on the other hand, 1 person out of 8 cannot get a mortgage or refinancing because their credit score is too low. Where do you want to be?
Shamrock Financial and Your Credit Score Range
Are you interested in finding out your credit score range? Or perhaps you want to increase your score but don’t know where to start? Shamrock can show you the what, how, and why. Make an appointment today and get started on the path to financial longevity. It’s easier than you think.