When thinking about obtaining a loan for a Silicon Valley property, it is a good idea to learn a bit about your FICO score. Understanding how this number is generated and ways that you can work on making it better can put you in better shape for being approved for a loan.
Before Applying for a Silicon Valley Home Loan, Check Your Credit Report for Errors
The FICO score is figured based on five factors. The first takes a look at your credit history. Fifteen percent of your score is based on how consistently you have paid bills over time. The next ten percent of the score is based on the variety in accounts that you have. Another ten percent takes a look at how many accounts you have open. If too many accounts are opened close together, it would point toward you being too dependant on borrowing to finance expenses. The larger percentages of your FICO score come from payment history and credit utilization ratio. Thirty-five percent of the score is based on if you pay bills when they are due each month. Thirty percent comes from the amount of credit you are using. Using 30% or less of your available credit can boost your score.
Before applying for a loan to finance the purchase of a Silicon Valley property, it may benefit you to take some time to try to improve your FICO score. There are several ways to do this. First, take a look at the credit report and check it over for errors. There could be an account listed that does not actually belong to you. Check that credit limits have been correctly recorded and that any accounts that have been paid off are accurately recorded. If there are errors, correct the mistakes as soon as possible. Other things that can benefit your score are either paying off a large portion of a balance or asking for raise in credit limit. These small things can make a positive impact on your credit score before trying to lock in a loan for a Silicon Valley home.