FICO originally stood for the Fair Isaac Corporation, and it’s the largest and best-known company that calculates credit scores. Now known simply as FICO, the company uses “predictive analytics” to evaluate your credit and predict whether or not you’ll pay your bills on time. So, if you’re shopping for a Brevard County mortgage, or elsewhere in Florida, your FICO score will have a large impact on whether or not you can get a mortgage and how much your interest rate will be.

What Goes into Your FICO Score?

Your FICO score is calculated from data in your credit report, and that data is grouped into five categories, which are then weighted to create your score. The breakdown is:

  • Payment history, 35 percent
  • Amounts owed, 30 percent
  • Length of credit history, 15 percent
  • Credit mix, 10 percent
  • New credit, 10 percent

Improving Your Score

With this information, you can easily see what actions you can take that will have the greatest impact on your FICO score. Here are some tips to boost your score:

  • Pay your bills on time. It seems obvious, but this is one of the best ways to improve your score. Your payment history is 35 percent of your score. A year of on-time payments can really improve your score.
  • Check your credit. Mistakes happen, and if they do, you need to find them. Get a free copy of your credit history, and review it carefully. Dispute any mistakes as quickly as possible.
  • Get a credit card. If you don’t have credit, you may need to establish it – responsibly, and show a history of on-time payments.  The longer you have established credit, the better. Don’t charge too much, and pay your bills on time.
  • Pay off debt. FICO looks at how much money you owe vs. how much credit you have available. For example, if you’ve got a credit card with a $5,000 limit and you owe $1,000, your debt utilization is 20 percent. Anything over 30 percent will typically drop your score.

Find out more about FICO scores

If you’re interested in obtaining a Brevard County mortgage, Embrace Home Loans can help you evaluate your FICO score and suggest ways you can get the best possible mortgage rates. Contact us at 407-733-6425 and let us work with you to get you the financing you need.