How Your Credit Score Can Affect Your Ability to Buy a New Home

Know How Credit Score Works Home Purchase Frank Duran Homes

When it comes to loans, bank or non-bank, it is essential to know the criteria based on which institutions decide whether or not you fit into the lending scheme. One indicator used to evaluate you is your FICO score, also called the credit score.

FICO (Fair Isaac Corporation) is an international algorithm that determines the degree of risk of a person applying for a loan. More straightforwardly put, your credit score is used to predict your behavior as a future borrower. Based on it, banks calculate the probability that you will comply with the loan conditions and return the money to them on time. I

The credit score is a figure used to describe, in numerical terms, your quality as a potential customer of banks and the degree of risk they have to take when granting you a loan. Your score and credit history can be found in the credit report, which provides complete information on your status. 

The credit score is determined by factors such as the payment history of previous loans, the duration of prior loans, the number of queries at credit bureaus, and the type and frequency of past installments. A low score means you have fewer chances to receive the desired credit, which can considerably affect your ability to buy a new home. Talking with a qualified Realtor at Frank Duran Homes can help you understand the steps you need to take to increase your credit score and prepare for your home purchase.



source https://blog.frankduranhomes.com/how-your-credit-score-can-affect-your-ability-to-buy-a-new-home/

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