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Debt & Planning

What or Who is FICO?


This is part three, in a six part series, on how to be an expert of your credit.

The FICO score is the most popular credit score model in the country. It’s a statistical calculation based on the information in your credit profile.

FICO reports several types of scores. Each is tailored for a different purpose, such as a credit card, personal, installment, auto or mortgage loan. A score from one model might not have accurate bearing for the next.

The common range of scores runs from 300 up to 850. Scores vary by year and economic conditions, yet typically, approximately 60 percent of U.S. consumers fall between 650 and 799.

If you would like to learn more about this topic or any other topics related to mortgages, please contact me today.

Credit Tips


This is part two, in a six part series, on how to be an expert of your credit. A good credit score is important for more reasons than just obtaining new credit. These days, it can factor into everything from landing a new job to getting the best deal on your insurance policies. It’s more important than ever to avoid late payments on your mortgage!

A 100 point drop for one late mortgage payment? It’s true. A single 30-day-late mortgage payment can cause your score to drop by as much as a hundred points. Credit scoring algorithms vary based on many factors, and in some instances, the damage may be even greater and last for years.

The costs accumulate. At the time, a single missed payment will cost you only a late fee, but the expense really adds up on your next loan or missed opportunity. Low credit scores typically mean a higher rate and cost. Higher rates can mean hundreds of thousands of dollars of extra expense over the life of a loan.

Missed payments are usually unplanned. Usually, events beyond our control lead to late payments, such as an accident, illness, job loss or family issue. At other times, carelessness or a hectic life may result in a forgotten payment.

What can you do?

Plan for the unexpected. Maintain an emergency cash reserve account equal to at least 3 months of living expenses or more.

Automate. If you’re prone to forgetting or don’t have a scheduled time to sit down and pay bills, set up auto payments through your checking account or put a perpetual reminder on your calendar.

Little other than time will decrease the negative impact of a late payment, so prevention is the one sure remedy. If you don’t already have a good system in place to assure timely payments and are not sure what’s best, reach out anytime. We’ll be happy to help set up a plan that’s right for you.

As always, we are happy to help here at Envoy; no question is too big or too small. Just contact me to get started.