Working as a loan officer for the last ten years I have been asked this question quite a few times. The easy answer is 720 and above. Of coarse, a good FICO score doesn’t guarantee you the best rates on a mortgage or even a car. Most of the clients that ask me this question do indeed have good credit and they know it. By asking me “what is a good FICO score” they are subliminally telling me “hey buddy I get the best rates so don’t get tricky.”
For the most part these customers are right; a good FICO score does usually mean the best rate. However, putting a loan together we have to look at all pieces of the pie. I have quoted borrowers with impeccable credit rates that made them want to slap me bóng đá trực tiếp. A good FICO score opens the gate for programs that people with lower credit scores cant even consider. However other pieces of the pie can definitely bump your rate upwards.
For instance, what if you have a good FICO score but cannot prove that you have enough income to afford the loan? What if your home is over the conforming loan amount and considered a Jumbo loan? What if you are on a fixed income and living off of your retirement funds? If your home is at a high loan to value that can get you too. The bottom line, I can help a person with excellent credit into a loan like this but their rate will be 1.5% – 2% over the average rate you see posted online.
Some mortgage programs and car loans have a minimum credit score and once you reach that plateau all the rates are the same. Meaning, if I have a 640 credit score and you have a 720 credit score and we both apply for the same mortgage my rate will be the same as yours under conforming guidelines. Some car loan guidelines work the same way. The difference between the two score is you may qualify to buy the car or house without a down payment where I may have to put 5% down.
So what is a good FICO score already? Lets start at the bottom and work our way up. Credit scores run from 450 – 850 on the FICO scale. After ten years of pulling credit I have never seen either score, I have seen close though. If your credit score that begins with a “4” are probably not going to be offered credit, there are exceptions but by in large I am right. Generally 500 – 599 is considered to be poor credit, D paper, sub-prime paper, these borrowers may get the loan but they will pay dearly for it.
FICO scores between 600 – 660 are typically graded as “c paper” up to “b paper”. These borrowers can expect to pay a higher price on credit cards, car loans but not necessarily when it comes to mortgages. When your FICO score reaches 680 – 720 you can usually expect to get the same rates as the person with the best FICO score. The only difference is that you will not have access to all of the programs that are available to the borrower with the higher FICO score.
One of the first things you will want to do is get a copy of your credit report. Then there are three major credit reporting agencies, all of which offer a free credit report once a year. You can obtain these reports from either calling them directly, going on the Internet and requesting a copy or you can write to them requesting a copy of your free credit report. Once you get your copies of your credit reports, you’ll want to look them over thoroughly.
What you are looking for are double entries on your report’s as they will lower your credit score. With all the discrepancies that you find in your credit reports, you will want to contact the credit reporting agency directly to have them removed from your credit report. You do this in writing and you can find on each of their website the forms to fill out to dispute anything on your credit report. They make it really simple for you to work with your credit score.
There are many lenders out there today that will help people with bad credit. While you may pay a higher interest rate at first, as long as you make your payments on time over a period of time, they will increase your credit and lower your interest rate. This helps to boost your credit score after showing you can make on-time payments to a credit agency. There are many lenders that focus on bad credit repair and that is the majority of their clients.
When you apply for credit the lender is looking for your debt to income ratio and what your scores on your credit reports are. A bad credit lender will help you consolidate your debt by paying off the current debt you have and giving you just one small monthly payment that you make to them. This helps increase your credit quickly and effectively as your debt is now paid off your own just one person.