In the modern world of constantly revolving debt, how you manage your paycheck and monthly bills may result in a lower interest rate when you decide to purchase a home or property and need to get a mortgage.
Most of us get a mortgage, have credit cards or some form of borrowing money, whether through a bank loan or trust company for long-term purchases such as a car or home. How you manage your monthly payments can come back to bite you if you’re not careful. Or it could provide you with a break on interest rates if you have been diligent in making those payments on time.
A FICO score is the best known and most widely used credit score model in the United States. FICO, named for the Fair Isaac Corporation, was created in the 1950s and continues to be the number one source for banks and credit companies to determine your risk factor when it comes to paying back a loan or assessing your reliability to get a mortgage.
A lending institution’s number one priority when lending money is ensuring they will get that money back – with interest. When you apply for a loan or get a mortgage, the bank will take a look at your credit history when determining if you are a good risk and how much they will agree to lend you. A FICO score will provide the bank with information about your credit history and your reliability as a customer.
Your payment history tops the list on your credit score with 35 percent of the value of your score determined by how you have managed your credit card balances or automobile loans in the past. Paying your bills on time will increase your score. To continus reading this article click Managing debt – Why your FICO score can lead to better mortgage rates
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