One of the biggest questions someone asks themselves when thinking about buying a house is do I qualify?

Why not take the mystery out of one piece of the concern.

FICO is. (Fair Isaac Corporation) is just one of the credit agencies but in truth it is what drives the five major international credit agencies and the three major ones in the US. FICO is used in 30 countries worldwide.

It drives over 10 billion credit decisions per year and is used by 90% of all lenders in the US. They are what drives Equifax, Experian and TransUnion.

CREDIT AGENCIES CONSIDER

  • Tradelines or Accounts
  • Credit Inquiries
  • Collections
  • Public Records

CREDIT AGENCIES DO NOT CONSIDER

  • Age, Address, Employment
  • Income, Race or Gender

FICO was designed to predict the future based on the past. This is why you cannot cure a bad payment history just by paying off bad debt.

There are seven different score versions that FICO works off of including credit card scoring and automobile scoring. Each lender picks the type score they want to receive. Mortgage lending tri-merges chooses from three different scoring models 2, 4 and 5 but we are all equal in mortgage lending FYI.

In order to obtain a score you cannot be dead, must have one trade line open at least six months or one existing account updated in the last six months.

The absolute ideal credit score consists of the following:

  • Zero delinquency
  • 1 – 6 overall active Revolving Accounts
  • 48+ months reviewed avg age of account
  • Zero inquiries in last six months
  • 1+ bankcard tradelines

FICO % of importance is the following:

  • 35% – Payment History
  • 30% – Outstanding Debt
  • 15% – Credit History Length
  • 10% – Credit Mix
  • -10% – Pursuing New Credit

It is these little tidbits of information that can give you confidence and hope to see if they qualify.

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