|
Thursday, 18 February 2010 |
By Raul Levine
 Your FICO score will be a determining factor in the setting of the interest rate on your mortgage. Put simply, your FICO score is a risk rating on you, the borrower. Data related to your financial responsibility is aggregated by institutions that you do business with, and it is this data that comprises your FICO score or credit score. So what exactly makes up your FICO score and how will it affect your mortgage interest rate and your monthly payments?
There are five basic components with respective percentages that make up your FICO score. They are payment history 35%, amounts owed 30%, length of credit history 15%, new credit 10%, and types of credit used 10%. As indicated by the aforementioned percentages, payment history carries the most weight in the composition of the score. Mortgage lenders need borrowers with exceptional payment histories so they can forecast future profit. To secure future profits, a lender needs to know that borrowers will be able to pay well into the future. The servicing of past debts is an excellent predictor of the |
|
Last Updated ( Thursday, 18 February 2010 )
|
|
Read more...
|
