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My husband and I have been looking to purchase our first home. Back in June, we found a house we were very interested in. The price was right, and it was in a good location. It was the perfect first home for our family.
One of the first things we needed to do was have our lender run a credit check on both my husband and I. We expected everything to go well. Unfortunately, we got a call from the lender letting us know that my husband had no FICO® score from two of the three major national credit bureaus. It had been over a year since he paid off his truck loan, and he had no credit cards in his name. We figured he’d have good credit because he paid his loan off early, never had late payments and had no other outstanding credit. But we were wrong. If you don’t have a FICO® score, it may not be possible to get a loan. Lenders want to be sure they are giving a loan to someone who’ll be responsible and who’ll be able to make payments. By having good FICO Scores, you are showing lenders that you are able to manage your credit well, that you are responsible and someone they can trust when it comes to making payments towards your loan.
According to the myFICO website, “FICO scores are the credit scores that most lenders use to determine your credit risk. Your FICO credit scores (you have 1 score from each of the 3 major credit bureaus) can affect how much money a lender will lend you and at what terms (interest rate). So, taking steps to improve your FICO scores can often help you qualify for better rates from lenders – which can save you money!” As you can see FICO scores do matter!
myFICO is a great resource for everyone. If we had been using myFICO at the time we were looking for our first home, we would have known that my husband didn’t have FICO scores from all bureaus. If we had known, we could have already been working on ways to get him a credit score! It is possible, but it will take time.
While we worked on my husbands credit, someone else ended up purchasing the house we had wanted. We really missed out on a great deal. The sad thing is, it would not have happened if we had been monitoring our FICO scores. I knew the scores were important, but I never imagined we’d find that he didn’t have them. You really never know what to expect, which is why credit monitoring is important.
If you’re looking to make a big purchase, whether it’s a new house or a car and you’re needing to get a loan for that purchase, your FICO scores are very important. The higher your score, the more likely you are to get a better interest rate. Better interest rates mean lower monthly payments. Lower payments mean you’ll be saving money in the long run!
This Loan Savings Calculator shows how FICO® scores impact the interest you pay on a loan. Check it out to help you prepare for your next loan!
If you’re not too familiar with FICO scores and would like to learn more. myFICO offers and education center where you can gain lots of valuable information. Frequently asked questions are listed. You can read through to find the answers to questions you might have. I learned a lot just by reading through the various questions and answers. The education center is a valuable resource for those looking to learn more about credit, FICO scores and finances.