FICO actually has several models for scoring related to credit products, including a special model for the mortgage industry. For this reason, if you check your FICO score through your bank or credit card company, it won’t necessarily be the same score your lender sees when you apply for a home mortgage. Base FICO scores range from 300 to 850. Here’s how the ranges break down:
• Exceptional: 800+ • Very good: 740–799 • Good: 670–739 • Fair: 580–669 • Poor: 579 and below
Scores are calculated from five factors:
• Payment history: 35% • Amounts owed: 30% • Length of credit history: 15%
• New credit: 10% • Credit mix: 10%
If you’ve experienced a foreclosure, bankruptcy, or other financial setbacks, the way to reestablish your credit history and raise your credit score is to use open credit accounts, manage them responsibly, and make timely payments. There is no substitute for patience and discipline, but if your credit report is in poor condition, there might be a few ways you can attempt to speed its recovery. Start by accessing your free credit report and score. You can obtain a free credit report once a year on the government website
118
Powered by FlippingBook