Frequently Asked Questions
700 points or higher would be considered very good in mortgage lending.
A FICO score is a credit score developed by Fair Isaac Company. Credit scoring is a method of determining the likelihood that credit users will pay their bills.
Credit scores analyze a borrower's credit history considering numerous factors such as:
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Late payments
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The amount of time credit has been established
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The amount of credit used versus the amount of credit available
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Length of time at present residence
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Negative credit information such as bankruptcies, charge-offs, collections, etc.
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The only debt that should be paid during the loan process is unsecured debt (credit cards). Paying collections will decrease the credit score due to the date of last activity becoming recent. But if you do decide to pay off a collection, MAKE SURE that the creditor gives you a letter of deletion first.
3 to 5 cards is best.
As close to zero as possible, but if you can't pay them to zero, try to keep your balances under 30% of the limit at all times.
NOT during a loan process. In general, if you close credit cards your score will most likely go down. It will appear to the FICO that your debt ratio has gone up. Also, closing a card will effect other factors in the score such as a length of credit history. But if you have to close a credit card account, close newer cards with lower limits first.
An inquiry can affect a score anywhere from 2 to 25 points depending on other elements in their report. If a borrower needs 5 to 10 points, a hard inquiry could make the difference in immediate loan approval.
NO, You can pull your report as many times as you want personally, and it will not affect your score.
Frequently Asked Questions
Maintain a good credit score by making timely payments, managing credit utilization, and reducing debt using strategies like the snowball or avalanche method to improve financial health and loan opportunities.