FICO has created a new prescriptive “Score Planner” tool that the company says will allow you to improve your credit score within a set time period by following a customized, detailed set of steps. Although it’s only in the pilot stage with one of the three national credit bureaus, Experian, FICO officials indicated that in the months ahead it should become widely available through participating banks, residential finance companies, brokers and others. Tom Quinn, FICO’s vice president of scores, said in an interview that it may be offered “for a fee or free of charge,” depending on the source.
How does it work? For this column, FICO prepared an example based on a hypothetical consumer’s credit report. The borrower currently has a sub-par 623 score but needs a 675 or higher for a home loan at an affordable interest rate. As with all the Score Planner’s scenarios, the home buyer sets a deadline — anywhere from a few months to as long as a year — to achieve a desired score. Doing so before you apply for a home loan not only will improve your chances for approval, it should also save you thousands of dollars.
Source: Ken Harney, The Nation's Housing