FICO is an acronym that stands for the Fair Isaac Corporation. The Fair Isaac Corporation (FICO) specializes in predictive analytics. They have developed a system that is designed to predict the risk associated with lending money to you in the form of a loan. According to Investopedia your FICO credit score makes up a substantial portion of the credit report that lenders use to assess an applicant’s credit risk and whether or not to extend a loan. FICO scores range from 300-850, with 300 being the lowest number and highest risk. The higher the number, the less risk there is associated with lending to you. So what’s a good FICO score? Ideally, you would want have a FICO credit score of about 650 or higher, but it truly depends on the lender and the nature of the loan you wish to receive.
Your FICO score can have a huge impact on your monthly mortgage payments. Your score will help to determine how much money your lender will loan you, how high or low your interest rates will be, and essentially how long you could be repaying your mortgage.
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You can see how a difference in your FICO score can lead to a significantly large monetary difference in your monthly payments. So remember to check your FICO score a few times a year, just to know the status of your financial standing. And always remember to check you FICO Score when you’re preparing to make a big financial move.