How to Master the FICO GameA Suze
Orman
exclusive Here are my top FICO tips.
Remember the Power of Three.
When you apply for a mortgage, some lenders compute an average of
all three of
your FICO scores to help determine what interest rate you will be charged. Some lenders take the middle score. So
when applying for a home mortgage or equity line of credit, make sure all three of your credit reports and scores are
in terrific shape before applying. Or at least make sure that your middle score looks good.
Know your partner's score.
If you plan to apply for a mortgage with a spouse or partner, make
sure you've
both had your FICO scores checked. Lenders may use the lower scores to determine the mortgage interest rate, or an
average of your combined scores. If one of you has a lousy credit history - and therefore lousy FICO scores - you
might
consider having the person with the good FICO scores apply alone.
Anticipate the lender's FICO move.
With some loans - such as car loans - the lender may not use all
three credit
scores but instead rely on just one credit score. So it doesn't hurt to ask which bureau they use before you
apply.
That way you can spend just $12.95 to get the FICO score that you really need rather than buying two more.
Beware of FAKE-O scores.
You may go onto other websites and see a FICO scored being offered for
$5. This
is not a true FICO score; they are what has been a FAKE-O score. They are simulated by the credit reporting bureau in
the hopes you will spend your good dollars to get your score from them. While sometimes they come close to being
able to simulate the formulas of FICO, in some instances they generate a score that is 50 - 100 points off the true
FICO score that your lenders most likely will check. It really pays to go for the real thing.
Pay your bills on time.
This one point bears repeating for your payment history makes up for
35% of your
FICO score. Just like that old schoolteacher who got on you for being late, lenders also hate it when you're tardy.
Being 30 days late with just one payment can send your score tumbling; so be prompt. And if you can't afford paying
the whole bill, at least fork over the minimum amount due. And if you realize that your payment is going to be late
if you rely
on regular mail, spend the money to get it there overnight.
Don't go card crazy.
Opening a bunch of new cards is a yellow light warning for lenders.
Historically folks
with a bunch of new credit are in worse credit risk; so don't put yourself in that higher risk group.< Prev | 1 2 | Next >Previous Article: Credit Reports: Check Them Now!
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