Empowering Yourself Through Your Credit Rating

Your FICO score is the number makes-or-breaks your ability to buy a house and determines whether you get the best rates or get charged enormous fees. You can directly affect the strength of your credit and, in turn, how much your dream house really costs you.

When applying for a mortgage, your credit rating is the primary factor in whether you qualify and how much you will pay in fees and interest. Your credit rating can be boiled down to one number between 300 and 850: your FICO score. It's meant to be a quick illustration of how likely you are to pay your bills on time, if at all.

In general, if your FICO score is above 720, you will have flexibility in what loans you can ask for and may qualify for a discount, and if your score is above 800, you have considerable bargaining power.

But if your FICO score is 680 or below, mortgages will be more expensive and much more difficult to get. The chart below from fico.org illustrates what factors get taken into account when determining your score.

Helping Your Credit Rating

• Have and use at least one credit card
• Only sparingly apply for loans, credit cards, or new lines of credit