Finance Guide

In order to purchase a house, car, boat, or other major item, you need credit, unless you are lucky enough to have a huge bank roll. Most people don’t. In order to get credit, you will need to have nearly perfect credit history. This is especially true when buying a house. Ever since the credit crisis pulled down the economy, lenders are using more rigid testing procedures to determine who they lend money to.

It used to be a credit score of at least 700 could get you credit easily. Not anymore. The market no longer does that. Unless you have dealt with a bank many times in the past, and they know you well, or you have good verifiable income, along with excellent credit history, you may just find a “reject” stamped on your loan application.

Although having a FICO score of 700 is good, it isn’t great. A higher FICO score is needed to qualify for loans. Many lenders are requiring you have to have higher FICO score of at least 720. This is if you want to get the lowest interest rates possible.

It would be a good idea to get a copy of all three of your credit reports, as well as to check your consumer credit score. Look at your credit report to determine why your FICO score is so low. You know a higher FICO score is needed to qualify for loans, so you should find every possible account that you may have forgotten about, or that may be keeping you from obtaining a high score. Maybe you have too much open debt. Maybe you have a habit of paying your bills late. What about your credit cards? Do they have high limits on them?

It is obvious having a higher FICO score is needed to qualify for loans. It will be up to you to investigate your credit to see where you stand. This way you can take the steps to raise your credit score, especially if it is below 720 (if this is the level that lenders are requiring).

Do your homework. If you are diligent in finding your FICO score and credit history, you can take the necessary steps to correct it. FICO has recently revised its scoring formula, so it’s a good idea to check out your score if you haven’t for awhile. Knowing where you stand means you have a better chance of getting a loan.