If someone sat down with you and told you what your current FICO score was, would you know what that meant and how important it was? If you ever wondered about how this particular set of numbers greatly impacts virtually every area of your life, this post was written for you.
Let's take a look at what FICO scores are, the importance of them as well as what a 'good' FICO score looks like.
Thirty years ago, the Fair Isaac Corporation (FICO) debuted what would later become known as the FICO score. This is a three-digit representation of your creditworthiness. Banks and other financial institutions utilize your FICO score to determine how likely you are to repay the money you are borrowing. Your FICO score is more often than not the deciding factor in obtaining any type of loan or even a request for utility services.
Your FICO score will also be the deciding factor in how much you can borrow, how long you have to repay your loan, and what the loan will cost you in terms of your interest rate. The higher your score, the better terms you will get on your loan or other requests for credit.
Look at it this way. A good or even excellent FICO score is very much like a stellar cover letter and resume, but instead of landing that dream job, you are being loaned money for that dream car, home, or business.
FICO scores are, as mentioned, a three-digit number that can be the difference between a 'yes', 'no', and several ways of looking at 'maybe' when trying to secure personal funding for automobiles, homes, or starting a small business.
Here is an example of the different number groups and how those numbers determine your likelihood of obtaining a loan from banks and other financial institutions.
The way FICO scores are determined has been a constant chain of evolution over the past 30 years and will continue to do so as needs and interest rates are constantly changing.
So, a good FICO score currently sits at 670 and beyond. Many lenders feel that this number makes you an ideal customer with which they want to do business.
At some point in all our lives, we will be asking a bank or other lender to fund something that matters to us. Keeping your FICO score in that 'good', 'very good' and 'excellent' range will determine how likely you are to receive those funds. Remember, your FICO score is that resume that makes you the most likely candidate for your loan!
Here are some valuable tips on maintaining a healthy FICO score.
If you live in the greater Duluth, Minnesota area, and you are considering a mortgage loan or would like to discuss your current FICO scores please feel free to contact us here at Lend Smart Mortgage.
We are a direct lender and a broker who will work one on one with you to exceed your expectations. If we don’t have a product that makes the most sense for you, we’ll find the lender that does. We’ll make sure you have the best loan at the best price. Choose Lend Smart- it’s the smarter way of doing business.
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