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Raise your FICO score  to buy a house in Palm Harbor with Remax Realtec as your REALTOR - 727-259-8953

First-Time Buyer's Guide to Better Credit

You might think that the home buying process starts with getting pre-approved for a loan or with choosing a real estate agent. In reality, the home buying process starts and ends with your finances. Without a reasonable FICO score, entering into a loan for a house is harder and, you could end up renting longer than you expected until you raise your score.

The Fair Isaac Company calculates your FICO score on the summary of your total credit history. Most people traditionally have a score of 650, but scores range from 300 to 850. Job loss has been common in the last few years, but FICO scores aren't necessarily adjusted "on a curve." A low score is a low score and that often means you can't get credit extended to you in the form of a mortgage loan. Some of the pieces in calculating your FICO score include:

  • Types of Credit — Do you have a healthy mix of loans and credit cards?
  • Payment History — How many months do you make late payments?
  • Credit to Debt Ratio — How much do you owe versus your available credit?
  • Credit Inquiries — Do you have too many open accounts?

When you pull your credit report, you'll find that you actually have three reports. Experian, Equifax and TransUnion — three of the major credit reporting agencies — use a slightly different models to calculate your credit rating. FICO is used by Experian. Equifax's model is called BEACON and TransUnion uses EMPIRICA. As a result, you have three scores, one for each scoring model.

When you apply for a mortgage or any other loan, lenders want to make sure that extending a loan to you isn't a problem. Your FICO score gives lenders view of what type of borrower you are solely because of your credit history. You'll need a score of at least 740 to get a acceptable interest rate. You can qualify for a loan with a lower score, but the interest paid over the life of the loan could be more than double that of an individual with a superior FICO score.

We're used to working with all tiers of FICO scores. Contact us and we can help you get on the right track to the home of your dreams.

You want a higher score, but how do you get there? Improving your FICO score takes time. I know it's difficult to make a significant change in your FICO score with quick fixes, but your score can improve in a few years by keeping tabs your credit report and by using your credit wisely. The best way to do this is to know your FICO score. Here are some ways you can improve your credit score:

    Raise your FICO score  to buy a property in Palm Harbor with Remax Realtec as your agent - 727-259-8953
  • Ensure that your credit history is correct. If you find mistakes on your credit report, write to the bureau requesting that the item be removed. If you have a common name or the same name as a family member, you'll want to give extra care to make sure the activity reported is correct.


  • Even out your debt. At first, this doesn't seem like a good idea. But, you don't want to have one card that is at the limit and have your remaining cards at a zero balance. It's better to have each of your cards at about 25% of their credit limit than to have all of your debt taking up the balance a single card.


  • Apply for gas cards or retail credit. For those who have no credit or low credit, store credit cards and gas credit cards are ways to establish your credit history, increase your credit limits and stay on top of your payments, which will raise your FICO score. Just beware of keeping a high balance for more than a couple of two because these types of cards normally have a surprisingly high interest rate.


  • Don't let your cards get dusty. Whether you're just getting started with credit, or if you've got older cards, use your cards so that your accounts stay active. But, make sure you pay them off in no more than two or three payments.


  • Keep up with payments. Late payments hurt your credit history. It's where people who have recently experienced job loss see the biggest hit in their credit score. Yes, it takes longer to rebuild your credit with payment history, but it's the most reliable way to prove that you're able to make payments to a lender.


Now that you know more about credit reporting, you'll be able to successfully take the first steps to homeownership, and that is improving your FICO score. Remember that when you're ready to apply for a loan to purchase a home, you'll want to keep your lender applications within a two-week window to avoid adverse effects your credit score. With the help of Remax Realtec, the loan process is sure to go more smoothly so you, too, can become a homeowner.

Learn more about FICO scores at www.myFICO.com, Fair Isaac's informational site and review your credit history for free at www.annualcreditreport.com. And, for a small payment, you can get your FICO score from each bureau on their websites: www.equifax.com, www.experian.com and www.transunion.com.

At Remax Realtec we work with all levels of credit and can help you get back into home ownership with the right lending insitution for you. E-mail us at jdevine7@tampabay.rr.com or call 727-259-8953 for additional information.