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WHAT’S A FICO®?

What is a FICO® Score?

FICO® stands for Fair Isaac & Company and is the name for the most well known credit scoring system, used by Experian. The credit bureau’s computer evaluates a complete credit profile and assigns a score, which is used to estimate credit worthiness. Each of the three bureaus (Experian, Trans Union, Equifax) employs its own scoring system, so a given person will usually have 3 separate scores. Someone with a higher score will be viewed as a better risk than someone with a lower score. Typically, scores will range from about 600 to 700 or above, although some cases will be outside this range.

What Kind of Score Do I Need for a Home Loan?

There are as many answers to this question as there are loan programs available. Most lenders will take the average of all 3 scores to evaluate an application. Niche loans, such as Easy Qualifier and low down payment loans will have higher FICO® requirements.

How is My Score Determined?

The FICO® model has 5 main elements:

  1. Past payment history (about 35% of score) The fewer the late payments the better. Recent late payments will have a much greater impact than a very old Bankruptcy with perfect credit since.
    Myth - paying off cards with recent late payments will fix things. Payoffs do not affect payment history.
  2. Credit use (about 30% of score) Low balances across several cards is better than the same balance concentrated on a few cards used closer to maximums. Too many cards can bring down the score, but closing accounts can often do more harm than good if the entire profile is not considered. BE CAREFUL WHEN CLOSING ACCOUNTS!
  3. Length of credit history (15% of score) The longer accounts have been open the better for the score. Opening new accounts and closing seasoned accounts can bring down a score a great deal.
  4. Types of credit used (10% of score) Finance company accounts score lower than bank or department store accounts.
  5. Inquiries (10% of score) Multiple inquiries can be a risk if several cards are applied for or other accounts are close to maxed out. Multiple mortgage or car inquiries within a 14 day period are counted as one inquiry.

How Can I Raise My Score

Your score can only be changed by the way that item is reported directly to the credit bureaus (Experian, TU, Equifax). Written confirmation from the creditor is required. It is best to make these corrections before you try to purchase a home, because you can never be sure the exact impact a change will have on your score.

What Does This Mean to Me?

You should have your credit reviewed BEFORE you look for a home, and work with a PROFESSIONAL loan officer to make sure your loan is based on the most accurate information.

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Nick Duzich
Hirschi Realtors
3631 Maplewood Ave., Ste. 1
Wichita Falls, TX 76308
Cell: 940-224-1224
Fax: 940-691-1213
Email:
NDuzich@HirschiRealtors.com
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Testimonials Page

We had such a great experience with Nick Duzich! We were very picky about finding the perfect house and he went above and beyond to make sure we found "The One" Thank you Nick for all your hard work. David & Lindsey Cadaoas, Wichita Falls, TX
Nick was most instrumental in selling my house. For every possible roadblock he was very resourcefull in helping me find a low cost and efficient way to overcome the difficulties. I would recommend Nick as an excellent agent to anyone wanting high quality services. I am greatful for all he did in selling my house Nancy Terry
Nick Duzich was very aggressive when it came to selling our house. We were in the process of being transferred to Corpus Christi and our family was split up. He knew this was a difficult time for us. Nick went above and beyond to make sure to market the house. We had lots of showings and he made sure it was advertised everywhere. It was non stop interest. We had to be on our toes with all the requests and showings. Nick did an amazing job and we were in contract within 3 weeks. Nick was always there for us and went above and beyond to help in any way he could. He is very professional and trustworthy. Nick treated our house with respect. He was very helpful and very easy to communicate with. Talking to him is like talking to a friend. You feel like you have known him for years. I would recommend Nick to anyone who is looking for a realtor who will come into your home and sit down with you and listen. He is definitely there for his clients and he will treat you like family. This was the easiest transition in all my house buying years.  The Wallanders, Wichita Falls, Texas
Nick was very intuitive to our needs. He made sure since we were moving from 6 hours away to get us in a neighborhood that would best fit with our needs. Nick is so easy to communicate with. His way of being friendly helped us communicate better with him. We would recommend him to anyone shopping for a home! Melissa Colclasure
We loved our experience with Nick and Hirschi. We love our new home and wouldn't have been able to go through everything as smoothly as we did with out him. He was friendly and easy to deal with. He is very personal and paid attention to the details we required in searching for our new home. He is a people person and cuts to the point, we trusted his opinion about how to handle the purchase. Thanks Nick! Brandi H.
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