What does FICO mean?
What is your FICO Score?
Why is it important?
The higher your FICO Score the less you pay in interest on credit cards, insurance and mortgages. FICO scores can range between 400 to 800, but as a Realtor anything over 700 is good.
For example if your FICO score is 500-579 you would pay 9.693% on a mortgage of $200.000. However if your FICO score is 760-800, you would only be paying 5.774% on a mortgage of $200,000.
The difference in your principal and interest would be $1,170.00 per month vs. $1709.94. Now that is serious money. That is a savings of $539.94 per month or $6479.28 per year.
You are allowed to check your credit score once a year without it hurting your credit. Everyone should do this, as there can be things that are wrong on your report that you might be unaware of.
Here is an example that happened to me once. My old credit card company got sold to a new one. I got a new card and life was good. Then we went to refinance our home and the old one had never been removed so it looked like I was carrying too much debt.
We were able to rectify the situation and go forward with the refinance but it took getting a letter from the old credit company to say the debt was not valid.
We work with Maria Labie and her team, Josie and Ken at Citizens First Bank, they are willing to pull your credit and help council you on ways to improve it. As you can see from the example above it is well worth it in purchasing a home.
Watch this video and you will understand about the 3 Credit Reporting Agencies.