FICO is different than that unknown entity that seems to take money from your check each week (FICA – an Acronym for Social Security). Your FICO score is a credit score provided by one of the major credit agencies in the U.S. This is the main score lenders and underwriters look at to determine your financial history. The higher the number the less risk you are to lenders.

How Do I Increase My FICO Score?How high does the score need to be for a home loan?

Any score above 680 usually qualifies for any type of home loan.  There are so many different loan programs and options out there that any score of 680 can usually get approved for an FHA loan or maybe even a conventional loan. There are specific programs out there for scores lower than 680 but you may pay a higher interest rate, fees, and insurance. FHA requires a credit score of at least 550 for a 3.5% down payment. If the score is 500 to 550 you’ll need at least a 10% down payment, but there are also down payment assistance programs that may be able to help with the down payment.

For a VA loan, most lenders require a minimum of 550. USDA loans require credit scores of 640 or higher and conventional loans are typically 620.

So, how do I increase my credit score?

It depends on how quickly you want to increase the credit score and how high. There are ways you can improve your credit score in less than a month. You want to correct any errors on your credit report. Simple mistakes or errors can lower your score.

You can raise available credit limit on credit cards or other loans so that you have more credit available. MORE: Can you buy a house with bad credit?

Reduce your debt to income ratio. You want to make sure that you have enough income to support the debt that you carry. Most home loans require a debt to income ratio of less than 43%. Read More: Understanding Debt and Your Options

Negotiate with creditors. You can actually ask creditors to erase debt or any debt that went to collections. You can write a letter to pay the remaining balance if the creditor will report the account as paid as agreed or even remove it altogether.

You can become an authorized user. This means you’ll need to ask a relative or friend to be added to his or her existing credit card accounts. This is an unusual way to gain credit and increase your credit score but it does work. Consider offering to put in writing an agreement to state how much you can spend and how you will get your share of the bill to the cardholder. Once you are responsible enough your credit will naturally increase.

Related: How to buy a house if your partner has bad credit

Don’t close paid off accounts. Keep credit lines open once you’ve paid them off so it looks like you have a lot of additional credit to be used. This shows you are responsible and are not maxing out your credit card each month.

Pay your bills on time. Simply paying all of your bills on time is a great way to increase your credit history and score. This goes for utility bills, rental payments, student and car loans, and any other monthly expenses.

These simple ways to increase your credit score really do work but one faulty move could bring it down again. Don’t neglect your financial responsibilities and you’ll be rewarded with lower rates and better mortgages.

Give me a call today and I’d be happy provide information on your score, tips to increase your FICO, and offer some of the most and best mortgage programs in the industry.

Call me today~! Our office is in the Lake Forest area, and we close loans all over Southern California.

Related > How Long Does it Take to Increase My Credit Score?