CHARLOTTE, N.C. (FOX 46 CHARLOTTE) - FICO scores are incredibly important to the success of your finances. In fact, it’s essentially a readout of how financially healthy you are. Depending on your score, it lets lenders know that you’re a good financial bet, or warns them that you’re a financial liability.
Here’s what you don’t want: to find out you fall into the latter category when you’re ready to go house shopping. Instead, start right now to make sure you’re on the right track.
According to Sarah Hebb, a mortgage banker with Atlantic Beach, is to run your FICO score reports with the big 3 credit reporting agencies: Equifax, Transunion and Experian. You’re aiming for at least 700 or better. That tells lenders that you’re a good candidate for a loan. If you score lower than 700, don’t panic! You have time to improve your credit through a few ways.
Take a good look at your credit history – do you have late payments you didn’t know about? Maybe there’s a situation that needs to be disputed. By having a clear picture of your credit, you can take action to correct it.
Sarah says analyze your spending, especially your revolving credit , ie credit cards. Total up your balances and make sure that they don’t exceed 33 percent of your available credit. If your debt is greater than 33 percent, commit to reducing your balances until you get to that level. As you pay off debt, don’t close those accounts. Leave them open to show that you can be trusted with credit.
Don’t feel like you need to go down this journey alone. Find a reputable mortgage banker or credit expert to help you. They can make suggestions and offer solutions to help improve your score.
However, buyer beware: don’t fall for those claims made by so-called credit repair agencies. You can’t buy your way out of bad credit and many of these companies will take your money without producing results.
If you’d like to work with Hebb on FICO scores or other financial issues, you can find her at my Facebook page Diana Alvear FOX 46. And while you’re there, make sure to like my page!