THE FICO SCOREFICO® is an acronym for Fair Isaacs and Company. The 'fico score' is also their trademark and is made up of a combination of different components of your credit history. There are other credit scores but it is the most commonly used method. Most other credit reports are generated using software developed by Fair Isaacs and Company and fico® is a component of all credit reports.
As an investor, it can be a distinct advantage to have a 720 FICO or better. Although, if you have a bad credit score going into the investing business, you don't need A Credit. You can start buying investment properties, flip them to other investors or lease option them to new buyers and keep the spread. You can do this until you have completed your process of repairing credit - and once again achieve an A Credit status. Or, until you have enough cash to start funding your own deals. It kind of depends on your investing style and your comfort zone for 'risk'. Most real estate investing gurus suggest that you never want to sign directly for new debt when you purchase investments properties. In general,the argument for this logic is as follows: The simplest way to eliminate risk in real estate investing is not to sign promissory notes and to purchase 'subject to' existing debt.Having said that, with current interest rates at 30 year low, it might make sense to take out a low interest home credit lines to buy and renovate rehabs or foreclosures. Then sell them quickly and pay back the credit line out of the proceeds. If you are planning on using this strategy, A+ Credit is a must because it will minimize the cost of your money for the investment, and thus improves your net profit. Try using one of these mortgage calculators to see how your fico score will affect your monthly payments. Perhaps the most important reason is that gives you more exit strategies and takes the time pressure off if you are doing a rehab, by keeping the holding costs down. As a homebuyer, a 720 Fico - or better - is a definite must if you plan to keep the property for any length of time, because you will pay considerably less cumulative interest over the term of the loan. We offer a variety of credit repair solutions for our clients and for investors. Find out what your fico score is here.
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