Northwestern WI home buyers who have the best credit scores get the best mortgage rates! Your credit score also affects your insurance premiums and many other aspects of your financial life. The more you know about your credit score, the better!
A credit score is your creditworthiness expressed in a number. Different scoring models exist, but FICO is the most common. FICO measures credit scores from 300 (lowest) to 850 (highest). Most mortgage lenders want to see a minimum FICO score of 640. This varies depending on the type of mortgage, the lender, and other considerations.
Your FICO credit score consists of the following factors, with some carrying more weight than others:
Payment history: 35% of your score comes from how well you pay on time.
Credit use: 30% of your score comes from how much credit you have available. In other words, if you have used up most of your available credit, it lowers your score.
Credit history: 15% of your score comes from the age of your accounts, or the extent of your credit experience.
New credit: 10% of your score comes from how often you apply for new credit. If you apply for credit too often, it could signal financial distress.
Credit mix: 10% of your score is based on the variety of credit you carry. Lenders like to see experience in managing different kinds of debt, though this isn’t a big part of your credit score.
Your FICO score may be available for free through your credit card company. Otherwise, you can obtain your FICO score, at a cost, through MyFico.com. TIP: Select “One-time Reports” under the “Choose a Plan” option.
You can also get your credit histories, for free, from the 3 major credit bureaus. These will not show your credit score, but they provide a list of your creditors and payment histories. This is an effective way to catch any unauthorized accounts or credit reporting errors. Visit annualcreditreport.com for more details!
When you’re ready to apply for a mortgage, let us know! We can refer you to local, reliable lenders who know and serve Northwestern Wisconsin. Six Lakes Realty is a locally-owned family business with over 45 years of experience. Contact us today for friendly, hometown service!
John Flor
Managing Broker
Six Lakes Realty
Office: (715) 924-4806
Email: john@sixlakesrealty.com