Your credit or “FICO” score is vital to your real estate investment career. It’s no secret that the higher your credit score, the better the chances of your obtaining loans and getting them at a lower interest rate. It keeps money in your pocket!
Remember this essential fact: lenders are in the business of loaning money and loaning it at the lowest risk possible so they’re going to look hard at your credit score before pulling cash out of their own pockets. This information tells you should understand how credit scores are calculated and what you can do to raise your own credit score if it’s low. This article provides you with that vital information Background on Credit Scores So, what exactly is a credit score? Simply put, it’s a formula used by lenders and others to give them an objective method to predict how likely it is that you will repay a new loan. A credit score is the result of complicated formulas for rating your credit worthiness.
You’ll often hear a credit score referred to as a “FICO” score. This term comes from two men named Fair and Isaac. In 1955, they founded a company called Fair Isaac Corporation. Over the years, the name got shortened to “FICO.” Fair, Isaac is a for-profit company, traded on the New York Stock Exchange (NYSE: FI). Their exact formula for calculating credit scores is proprietary; that is, it’s secret.
Each of the major American credit reporting agencies (CRAs) has…
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