During the process of purchasing Carmel Valley real estate, you need to acquire a reasonable mortgage loan. It would be wise if you get pre-approved even before you do start shopping around so that your offer would be more likely accepted by the seller - being pre-approved shows that you are very serious about buying the home and that you are very much prepared. For obvious reasons, you would like to have the best loan available and to achieve this, you ought to have an impressive FICO or credit score considering that banks and lending institutions these days are becoming more austere when it comes to their lending standards.

A FICO score is a kind of credit score that comprises a considerable part of credit reports that are used by lenders to assess the credit risk of applicants and whether or not they would extend a loan.

Generally, it is a number between 300 and 850 based on one's credit and payment history such as its length, how much money owed, the credit accounts opened, and the manner one uses credit. The term FICO is a short form for the Fair Isaac Corporation - the creators.

The general score that is considered high is above 650 - people who have a score below 620 will likely find it harder to get financing at a good rate. This is the reason why you should improve your credit score when purchasing Carmel Valley homes for sale.

The following are five tips that can help you improve your FICO score:

1. Be prompt on paying your bills - This might seem simple for some, but considering the difficulties in the economic times nowadays, more borrowers are having a hard time on making a decision on what bills to pay first. If you're experiencing this problem, you should ask for help from your lender or the institution you are indebted; they might have some suggestions or programs that can aid you in preventing your bills from being sent to collections.

2. Never let items be sent to collections - Once this happens, your credit report would surely suffer since it would remain there for seven years.

3. Never open a new credit line when applying for a mortgage loan to buy a home - You may feel like buying that new car you want or brand new furniture, but this isn't the right time to have more new accounts as it can surely reduce your credit score temporarily. If you go through this before having your mortgage finalized, you may possibly find yourself stuck with an even higher interest rate.

4. Check on your report regularly - You should do this to see if there are any errors or even identity theft cases. Remember, mistakes happen. Get them corrected right away by contacting the credit bureau and the institution that gave the wrong information. In the case of ab identity theft, you are the one responsible in identifying and dealing with it.

5. Pay your credit cards - If you have high balances on your credit cards, this can have a terrible effect on your credit score so be sure to pay them.