Why do I need a FICO score?

Real Estate Sales Representative with Keller Williams Realty- Boerne Hill Country

Have you ever went to purchase a home, car, furniture or  pretty much anything and they inform you that your FICO score is to low? When you really think about it what is a FICO score and why do I need one? What does the word FICO mean?

The word FICO comes from Fair Isaac Corporation (FICO) is a publicly traded company that offers a service to financial institutions to underwrite the risk of granting a line of credit or loan. You may or may not agree with their modeling systems but it is the most popular in the US. FICO scores are used by the three largest credit agencies in the US—TransUnion, Equifax and Experian. This is how your FICO score is broken down.

                                        FICO breakdown

They are broken down into five categories based on the importance for the general population. These may be different for people who have not been using credit long.

If you need help in repairing your FICO score please check out-

How to repair my credit and improve my FICO credit score

FICO scores range from 300 to 850. The higher the FICO score, the better. The “acceptable” score depends on the industry and type of credit requested but is usually around 650. A score lower than 650 triggers higher interest rates, more collateral, down payment and a royal welcome to the world of sub-primers.

We have included a link to Understanding your FICO score as well.

There are many new loan programs out there that can assist you in buying your home. We have lenders and can answer your questions. Programs that help with down pay and closing cost.

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