Chapter 5

Understanding and Improving Your Credit Score

In This Chapter

Understanding the importance of credit scores and credit reports

Looking at what factors determine your FICO score and how to improve it

Boosting your credit score to get better loan terms

You can’t play the home-buying game if you can’t pay. And most people can’t pay without a mortgage.

When you apply for a loan, lenders try to determine your credit risk level. If they decide to loan you money, what are the odds that you’ll pay them back on time? To understand your credit risk, most lenders look at your credit score. Your score influences the credit that’s available to you and the terms of any mortgage that lenders offer you.