Your FICO score is an extremely influential number when it comes to determining whether or not you are eligible for mortgage financing. Your FICO score tells creditors, at a glance, whether or not you’re a good risk, and helps to determine whether or not they’re willing to dig deeper into your history to make a mortgage financing decision. Some mortgage companies won’t touch borrowers under a certain FICO score, while others have very strict requirements for credit histories with low FICO scores. 

Who determines the FICO score?

You get a FICO score for each credit reporting agency. There are three main reporting agencies, and it’s possible to have a different FICO score with each successive agency. The FICO score is based on the information contained in your credit report about your credit history, and doesn’t take into consideration your income, your job or any other extraneous information.

The good, the bad and the ugly: How high is your FICO score?

FICO scores range from a low of 300 to a high of 850. Different lenders use different guidelines for a minimum, low and acceptable credit score. Generally, FICO scores above 700 are considered good, while scores below 600 are considered sub-par, although that can vary depending on the lender. If your FICO score is low, you may be able to work to improve it, although such changes don’t typically happen overnight.

How can you improve your FICO score?

Several things affect your FICO score, so there are several ways you can work to improve it. One big factor in your FICO score is your current credit balances compared to your total credit. If you’re using most or all of your available credit, your FICO score is lower. However, if you’re carrying low balances and lenders have extended you a fair amount of credit, your FICO score is higher. Therefore, paying down your credit balances can make your FICO score go up.

Additionally, you can remove negative items to improve your FICO score. If you’ve got old negative items on your credit report and it’s past the date when they’re legally allowed to remain, get the credit bureau to remove them. Derogatory items can make a big difference in your FICO score, and if you can remove them, you’ll notice a bounce in your numbers.