ARTICLES FOR BUYERS

Back to Search Tool & More Articles

Credit Score – How is it works?

We’ve all seen the commercials offering free credit reports and services to improve your credit score, and in today’s modern economy, your ability to enjoy a good quality of life is directly tied to your ability to secure credit. But what do those numbers actually mean? Who determines your credit score, and how does it affect you?

The most commonly used credit score is the FICO. This rating system was first developed in the late 1950s by Fair Isaac and Company, today known as the Fair Isaac Corporation. The FICO score is determined through a set of statistics derived from things like payment history, previous uses of credit such as loans or charge accounts, and types of credit used, like mortgages and installment loans.

The FICO score gives banks and other financial institutions a ‘snapshot’ look at someone’s credit history to help assess their risk as a borrower. If you have a good score, lenders compete for your business in the form of lower interest rates and better payment terms. If you have a poor score, you will face stiff interest rates and in many cases have difficulty obtaining credit.

What determines your score?

Your FICO score is based on the following percentages-

  • 35% Payment history- do you pay bills on time, or do you have a history of late payments?
  • 30% Credit utilization- this is the ratio of your debt compared to your total available credit
  • 15% Credit history- the length of time that you have been establishing credit in your own name
  • 10% Types of credit- successfully managing different forms of credit (consumer finance, mortgage) will improve your score
  • 10% Recent credit search history- multiple credit applications and checks can be an indicator of financial hardship and can contribute to a decline in credit rating. Credit checks initiated by you, your employer, or by a company offering pre-approved credit do not impact your FICO score.

FICO Score ranges and what they mean

  • 800 and up- Excellent- Your score makes you extremely attractive to lenders, and you have no problem securing credit at the lowest available interest and annual percentage rates. Maintaining a score at this level means using a significant amount of monthly credit and paying it off in advance.
  • 700-799- Very Good- Just over 25% of the Unites States enjoys a credit score in this range. You are disciplined with your finances and are able to secure credit from just about any institution at competitive rates.
  • 680-699- Good- At this range you are able to get approved easily for loans and credit, but you will be paying a higher interest rate than you would at a higher score. If you are considering a long term obligation like a mortgage, you may want to boost your score or you’ll pay more over the life of the loan.
  • 620-679- Okay to Fair- You are able to get financing when you need it, but you’ll be paying more for it and have less options. The good news is you can bring up your score to a more attractive level without too much difficulty.
  • 580-619- Poor- With a FICO score of Poor, you may be able to obtain unsecured personal loans and certain mortgages, but you’ll be paying top dollar in interest rates and other fees. In this range you should be actively working to improve your score.
  • 500-570- Bad- If you qualify for any loans, they will be small and at maximum interest levels. Debt consolidation and personal bankruptcy may be looming without careful action.
  • 499 and lower- Very Bad- You will need professional help to repair your credit and get a handle on your finances. By working with a credit counselor you will be able to dig out, but it will take time and discipline.

Certainly a FICO score doesn’t tell the full story of a person’s ability to repay a loan, but from the perspective of a financial institution it’s a quick and accurate risk assessment, and remains widely used. When you maintain a good score, you maximize your credit options and enjoy a substantial savings in interest and other fees.

Back to Search Tool & More Articles

Quick Calculator

Monthly Housing Payment

$
U.S. Interest rates vary from 3.5% to 7.5% depending on credit score. Consult a lender to know your interest rate.
%
(Years)
$
$
$

Monthly Principal + Interest =

Monthly Tax =

Monthly Insurance =

Monthly Payment

Advance Calculators

Calculators provided for estimating purposes only. Consult with your lender to determine precise payment

Mortgage Center

Mortgage Solutions

Find the mortgage that fits your budget and lifestyle with specialized tools and key information that can deliver big savings.

Get Pre-Qualify Today!

Mortgage Calculators

Understanding your options is crucial in making the right decisions. Let us show you what you could afford and how we can help you get pre-approved for maximum flexibility in negotiations.

Advance Calculators

Duk Homes - South Florida Results

Fort Lauderdale single homes for sale
Fort Lauderdale condos for sale
Fort Lauderdale beach house for sale

Miami single homes for sale
Miami condos for sale
Miami beach house for sale

Boca Raton single homes for sale
Boca Raton condos for sale
Boca Raton beach house for sale

Coral Springs single homes for sale
Coral Springs condos for sale
Coral Springs beach house for sale

Sunrise single homes for sale
Sunrise condos for sale
Sunrise beach house for sale

Deerfiled single homes for sale
Deerfiled condos for sale
Deerfiled beach house for sale

Weston single homes for sale
Weston condos for sale
Weston beach house for sale

Hollywood single homes for sale
Hollywood condos for sale
Hollywood beach house for sale

Light House single homes for sale
Light House condos for sale
Light House beach house for sale

Pompano Beach single homes for sale
Pompano Beach condos for sale
Pompano Beach beach house for sale

www.DukHomes.com is a real estate search engine Website that helps you find homes for sale and homes for rent. Our goal is to help you make smarter real estate decisions in the process of selling, buying or investing. How? By analyzing real estate information on thousands of homes in Florida as well as helping you understand hyper-local real estate trends. Refine your real estate search in Florida by price, number of bedrooms, bathrooms, property type (including townhouses, condominiums and single-family homes), and more. See local real estate trends, and compare your home to recently sold homes and to similar homes for sale in your Florida neighborhood. View our real estate guide to see average listing prices, sale prices and information for local school districts. Not ready to buy yet? or maybe you are just looking for a vacation home rental. Join DUK to find and compare rentals in across Florida or any Florida town or city.

Residential Real Estate in Florida

Aventura Real Estate / Bal Harbour Real Estate / Bay Harbor island Real Estate / Big Pine Key Real Estate / Biscayne Gardens Real Estate / Boca Raton Real Estate / Bokeelia Real Estate / Boyton Beach Real Estate / Coconut Creek Real Estate / Coconut Grove Real Estate / Cooper City Real Estate / Coral Gables Real Estate / Coral Springs Real Estate / Cluter Bay Real Estate / Dania Real Estate / Deerfield Beach Real Estate / Doral Real Estate / Fisher Island Real Estate / Florida City Real Estate / Fort Lauderdale Real Estate / Fort Pierce Real Estate / Golden beach Real Estate / Grant Real Estate / Green Acres Real Estate / Hallandale Real Estate / Hialeah Real Estate / Highland Beach Real Estate / Hillsboro Beach Real Estate / Hobe Sound Real Estate / Hollywood Real Estate / Homestead Real Estate / Hutchinson Island Real Estate / Hypoluxo Real Estate / Inverness Real Estate / Islands - Caribbean Real Estate / Jensen Beach Real Estate / Juno Beach Real Estate / Jupiter Real Estate / Kendall Real Estate / Key Biscayne Real Estate / Lake Park Real Estate / Lake Wales Real Estate / Lakeworth Real Estate / Lantana Real Estate / Lauderdale By The Sea Real Estate / Lauderhill Real Estate / Lehigh Acres Real Estate / Lighthouse Point Real Estate / Loxahatchee Real Estate / Margate Real Estate / Miami Real Estate / Miami Beach Real Estate / Miami Gardens Real Estate / Miami Lakes Real Estate / Miami Shores Real Estate / Miramar Real Estate Miromar Lakes Real Estate / North Bay Village Real Estate / North lauderdale Real Estate / North Miami Beach Real Estate / Okland Park Real Estate / Ocean Ridge Real Estate / Opa-Locka Real Estate / Palm Beach Real Estate / Palm Beach Gardens Real Estate / Palm Springs Real Estate / Palmetto Bay Real Estate / Parkland Real Estate / Pembroke Park Real Estate / Pembroke Pines Real Estate / Pinecrest Real Estate / Plantation Real Estate / Pompano Beach Real Estate / Port St Lucie Real Estate / Rivera Beach Real Estate / Royal Palm Beach Real Estate / Saint Augustine Real Estate / Sea Ranch Lakes Real Estate / Singer Island / Southwest Ranches Real Estate / Stuart Real Estate / Sunny Isles Beach Real Estate / Sunrise Real Estate / Surfside Real Estate / Tallahassee Real Estate / Tamarac Real Estate / Vero beach Real Estate / Wellington Real Estate / West Palm Beach Real Estate / West Park Real Estate / Weston Real Estate / Wilton Manors Real Estate / Winter Haven Real Estate

Copyright 2011 DUK HOMES, a DBA of Ocean Grand Realty, LLC. All rights reserved |

Fair Housing and Equal Opportunity

Privacy Policy - Terms of use

© This Website is property of Pesavi Advertising Design, Inc. / All Rights Reserve / Copy or duplication of information posted or related to this website can bring serious legal consecuences.

Designed, developed and SEO by Pesavi Advertising Design, Inc