Investing in Flip and Fix has grown increasingly popular. When considering one, there are a few factors that lenders should keep in mind. A FICO Score is one of the most significant factors. It’s a three-digit number calculated using information from your credit reports. Lenders use this score to determine whether or not a borrower will be able to repay their debts. As a result, FICO ratings determine a borrower’s eligibility and the borrowing restrictions with which a lender should work.
The Fair Isaac Corporation (FICO) developed the FICO score thirty years ago, and it remains one of the quickest ways to evaluate whether or not a person is eligible for a loan. The following information is contained in the score:
- For how long have you had credit?
- How much credit you have?
- How much of the credit available is being used?
- And whether you have paid the debt on time.
Paying bills on time, not having too much debt, and making educated financial decisions can help borrowers improve their credit scores. As a result, most lenders look for the FICO score when determining the risk of lending money to someone. A lender can use the following sources to obtain a credit score:
- A common website created by three national credit reporting organizations,
- A toll-free telephone number
- Additionally, mailing address where you can receive your free annual report.
A lender must constantly make sure that the borrower is not a risk, or else they should not be approved for a loan. To know more about the FICO score, click right here.
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Note Servicing Center provides professional, fully compliant loan servicing for private mortgage investors so they can avoid the aggravation of servicing their own loans and just relax and get paid.
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