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You need to know your FICO

Posted on August 14, 2015 by Ray Williams (NMLS #216267).

I can’t stress enough the importance of knowing your FICO score when you are looking to get pre-approved for a home loan.  Whether you are looking to refinance or to purchase your credit score (FICO) is critical!  My only caution would be make sure you are not just getting a “credit score” you need to make sure it is your FICO score.

If you know you have collections you will want to get these take care of before looking to get pre-approved.  If any collections have turned into a judgement then you will have to take care of all judgments before applying for a mortgage.  This is a stopping point for any lender.  The main importance on clearing/satisfying a judgment is that after paying the judgment and getting it satisfied you will then need to go to the county in which the judgment was filed and get the “release of judgment”.  This is critical! Paying it off will not remove it from the credit bureaus.  You will need to get the release of judgement from the county, which is a certified copy that you pay the county to release to you. Then this release needs to be sent to the credit bureaus (Experian, Transunion, Equifax) in order for them to remove the judgment from your credit report.  You will only need to send to the bureaus that are reporting the judgment.

Remember to also keep your existing credit card debt no higher than 30% of your available credit limit.  If it is 50% or higher than this will report negatively on your credit report and will bring your FICO score down.  You may also want to ask your credit card holder when they report to the bureaus.  This is important because you will want to make sure you are paying off and/or down your debt prior to them reporting.  Make sense?

My key point is that if you are looking to purchase a home or refinance your existing home, you need to make sure your credit scores are in a good position.  Your credit score will affect not only your rate and loan programs available to you but can also hinder you from obtaining a mortgage at all.

If you have any questions or would like to get pre-approved please give us a call we are always happy to help.

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