Your FICO Score

A FICO score is a numeric score that summarizes your credit history. FICO scores are provided to lenders by credit reporting companies. The score is intended to be a predictor of whether you are likely to repay a loan according to the loan terms. In addition to your FICO score, lenders may base their decision to issue you credit on:

• Your income and how it compares to your prospective payment amount;
• Other debt payments you are making; and
• The appraised value of your home.

What Does My Score Mean?

Anything over 720 is considered by most mortgage lenders to entitle the borrower to the lowest interest rate and best terms. Between 680 and 720 is considered “good” and you’ll likely receive good loan terms. Below 660 may require special lender attention.

Some lenders may rquire credit scores of 700 or higher for certain loan products, such as interest only loans.

Generally speaking, the higher your credit score is, the greater your likelihood of being approved for the loan you want.

How is My FICO Score Determined?

FICO scores are calculated and provided by a company called Fair, Isaac & Co.
(myFICO.com). The company has statistically analyzed credit histories of a large number of borrowers, and has used those analyses to predict which factors in a person's credit history may indicate future inability to repay debts.

Factors that may be used to determine your FICO score include:

• Payment History - How you pay your credit back (35% of fico score)
• The amount of credit you have outstanding (30%)
• Length of Credit History (15%)
• New Credit (10%)
• Type of Credit Use (10%)

How Can I Improve My FICO Score?

Over the long term you can improve you credit-worthiness by:

• Reducing your total indebtedness;
• Making your debt payments on time and in full;
• Closing unneeded credit accounts; and
• Avoiding bankruptcy and foreclosures.

Once you have your FICO® Score, you can use the FICO® Score Simulator at myFICO.com to estimate how your score might change.