Understanding Your FICO Score

Sale prices in the Providence Metro area increased 6.1 % in the four months ending Feb. 28 compared with the quarter ending Oct. 31, according to the Clear Capital Home Data Index, faster than anywhere else in the nation.   Many people are taking advantage of low interest rates home prices, and the homebuyer tax credit. But many people are finding tighter lending standards are leaving them cold.   Those with less than perfect credit pay a premium for almost everything.   This week Rich and Steve spoke with Paul Decoste from Advantus Credit Reporting Agency to talk about maintaining a good credit score. Credit scores affect not only what you pay for credit cards, auto loans, mortgages and other credit but insurance companies and potential employers look at credit scores as well . Paul recommended visiting www.myfico.com   to see how different scenarios can affect your credit rating.   According to the website, a borrower with an established good credit history can expect to see their FICO score fall over 200 points if they declare bankruptcy.   That would result in a subprime score requiring a larger down payment and a higher interest rate.   While prime borrowers are presently enjoying rates around 5%, a borrower with a FICO score in the 620 to 639 range can expect to pay about 6.3% interest on a conventional loan with 20 percent down. On a $200,000 loan, that would be over $70,000 more in interest over the life of the loan. This Week's Real Estate Insight: Despite the catchy jingles, freecreditreport.com is only free if you remember to cancel the service in a timely manner. The only site from which to get a truly free report is AnnualCreditReport.com . When you first get to the official site, you must read carefully, so you won't be diverted to other sites. There is bold red lettering that says: "Start here to view and print your credit report now." Then you select the state you live in to begin the free-credit-report process