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  • Danh Truong

What is a Credit Score and Why Does it Matter?

We all hear about credit scores. But what exactly is a credit score?

A credit score represents one’s credit worthiness. There are three credit reporting agencies in the U.S and they have their own analysis based on Fair Isaac Corporation FICO method.

Here is a pie chart which will give you facts on how FICO works:

The FICO credit score ranges from 300-850. If you are shopping for a mortgage, your score would have to be greater than 680. If you want the best interest rate that is available, your score would have to be above 740. In addition, lenders will look at your income, payment history, and job stability when you apply for a mortgage.

Your FICO score is not affected by:

  • Your race, color, religion, origin, or sex

  • Your salary, occupation, marital status, age, or residence

  • Your personal inquiries; meaning it’s OK to check your credit score or report for yourself

Tips: How to raise your FICO score?

  • Pay your bills on time

  • Get current with your bills and stay current

  • Avoid collections

  • Keep your credit card balance low

  • Pay off debt instead of moving it around

  • Contact creditors to negotiate easier payment schedule

Your score will not improve overnight. However, if you keep it consistent over 3-6 months, you will see an upward trend in your score. It is important to keep track of your score and have a plan to get a better score. Your credit is one of your biggest assets and if you utilize it correctly, the benefits are endless.

Thank you for reading this far and you can reach me at

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Danh Truong CAL BRE#01951829 Realtor at EQ1 Real Estate

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