Welcome or Register
Back to Table of Contents

FICO® Score - a Brief Explanation

When you apply for a mortgage loan, you expect your lender to pull a credit report and look at whether you’ve made your payments on time. What you may not expect is that they seem to be more interested in your FICO® score.

“What’s a FICO® score?” is a common reaction.

Each time your credit report is pulled, it is run through a computer program with a built-in scorecard. Points are awarded or deducted based on certain items such as how long you have had credit cards, whether you make your payments on time, if your credit balances are near maximum, and assorted other variables. When the credit report prints in your lender’s office, the total score is displayed. Your score can be anywhere between the high 300’s and the low 850’s.

Lenders wanted to determine if there was any relationship between these credit scores and whether borrowers made their payments on time, so they did a study. The study showed that borrowers with scores above 680 almost always made their payments on time. Borrowers with scores below 600 seemed fairly certain to develop problems.

As a result, credit scoring became a more important factor in approving mortgage loans. Credit scores also made it easier to develop artificial intelligence computer programs that could make a “yes” decision for loans that should obviously be approved. Nowadays, a computer and not a person may have actually approved your mortgage.

In short, lower credit scores require a more thorough review than higher scores. Often, mortgage lenders will not even consider a score below 600.

Some of the things that affect your FICO score are:

  • Delinquencies
  • Too many accounts opened within the last twelve months
  • Short credit history
  • Balances on revolving credit are near the maximum limits
  • Public records, such as tax liens, judgments, or bankruptcies
  • No recent credit card balances
  • Too many recent credit inquiries
  • Too few revolving accounts
  • Too many revolving accounts

FICO® actually stands for Fair Isaac and Company, which is the company used by the Experian (formerly TRW) credit bureau to calculate credit scores. Trans-Union and Equifax are two other credit bureaus who also provide credit scores.

Back to Table of Contents

Quick Search


view all


Any

Any

No Min.

No Max.
agent photo
SALLIE CHESTER, REALTOR®
EXIT Real Estate Consultants
5175 Sunset Blvd, Ste 3
Lexington, SC 29072
Phone: 803-707-8595
Fax:  803-358-0889
Email: salliechester@exitrec.com

Client Testimonials

We, of course, are very happy and blessed to have had Sallie sell our home. Her team is wonderful also. We highly recommend Sallie Chester!  Melissa B. ~June 2019
Sallie and her team were very helpful and 100% on top of the entire selling process of our condo. From our original meeting, Sallie gave us great advice on selling quickly and for a fair price. She worked tirelessly to negotiate terms with the buyers' agent about the conditions of the transaction and kept us up-to-date with any changes that had come about. We used Sallie to both purchase and sell our condo and I would be happy to recommend her to anyone buying or selling property in the Columbia area. I truly appreciated her expertise and persistence in everything she did. Joshua S. ~June 2019
Sallie was very professional and dependable in all of our dealings.  We appreciated her counsel and experience, and would recommend her highly. Karen and Eddie W. ~May 2019
We recently purchased a house in Harbour Watch, that we absolutely love, through Sallie Chester.  Our relationship with Sallie began with a get to know each other phone call where trust was soon established.  We then made the trip from Virginia to South Carolina to meet Sallie in person, and she showed us several lots and houses that weekend, one of which we ended up purchasing.  The purchase took longer than anticipated because it was initially contingent on the sale of our house in VA.  Sallie was extremely patient and responsive to all of our needs throughout the entire process.  Sallie is honest, hardworking and provides excellent customer service.  We highly recommend using her services. Ann and Barry N. ~February 2019
Sallie Chester was everything we could have hoped for in the sale of our house; very knowledgeable with good advice and with such a friendly attitude. I would highly recommend Sallie to anyone who is seriously wanting to sell or buy property on Lake Murray. Shirley and David S. ~February 2019
View All

Equal Housing OpportunityMLS membershipREALTOR® certification

Real Estate Websites by iHOUSEweb iconiHOUSEweb | Admin Menu