Your FICO Score and Lenders

We all hear how important it is to not only check on your credit report at the three major credit bureaus (Equifax, Experian, and Transunion)  but also that we should know our FICO scores.  It is an intricate process involving a mathematical equation and comparisons to patterns in hundreds of thousands of past credit reports.  This allows them to arrive at this score that estimates your level of future credit risk, ranging from 300 to 850.  I think you can guess that you don’t want to be at 300, would like to be at 850, but many/most fall somewhere in the 600 to 700 range.  The higher the score the better the interest rate you receive.  Make sense as the risk becomes less as your score increases.

I subscribe to a newsletter from Valley Credit Repair in Lawrence MA (Kim Carpentier  He recently sent out information on what makes up that FICO score and it is really very interesting to see the %s that apply –

35% of your Credit Score —  Payment History.  This includes missed payments, collections, bankruptcies etc.  The older the information the less of an impact.

30% of your Credit Score — Utilization.  This is the amount of credit you have in used compared to your available credit.  It is suggested that 10% of your available credit be utilized.

15% of your Credit Score  — Credit History.  How long you’ve had accounts open.

10% of your Credit Score — Inquiries.  If you apply for credit and then don’t get it, it will impact you negatively. 

10% of your Credit Score  — Types of Credit. That would include mortgages, auto loans, revolving credit and installments.

For those who may ask the question, what about my income.  Your income has nothing to do with your credit score. 

So as you can see it is important to review all three of your credit reports at least once a year (free service at since what appears there is what affects your FICO score.  And the official website for obtaining your FICO score is

Being armed with information and making any changes needed to improve your score can mean the difference of nearly 1.5% points in interest between a score of 620 and a score of 700 or more.  In a mortgage for instance that is many thousands of dollars over the length of the mortgage. 

Subscribe to Kim’s newsletter by emailing him at  Be sure to get your credit reports from the three credit companies, and check your FICO score.  You may be paying a higher interest rate than you need to.  Your credit score can be improved.

Spring market is right around the corner.  Be prepared. 

And if you have a home to sell, contact me for your free market evaluation.  Let’s work together to get the most for your home so we can find you your next dream home!

Joan Parcewski, Realtor and Notary       O 978-262-9665         C 978-376-3978

Woods Real Estate    655 Boston Rd Unit 6A   Billerica MA 01821



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