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2016-05-03 14:39:31
Understanding and Improving Your Credit Scores

Understanding and Improving Your Credit Scores

Most people are aware that their credit score is important when purchasing a home, but there is often quite a bit of confusion about what factors determine a score, and how you can improve your credit score.

Below is some useful information to help answer your credit score questions.

Factors that Determine Credit Scores

Payment History = 35%

·  Do you pay your credit on time?

·  Length of positive credit history

·  Severity & quantity of delinquencies

Amount of Debt = 30% 

·  Quantity of credit Accounts - too many credit cards with balances can lower a score.

Length of Credit History = 15%

·  The longer the history, the better.

·  How long have your credit accounts been established?

·  How long has it been since you used certain accounts?

New Credit = 10%

·  Research shows that opening several credit accounts in a short period of time does represent greater risk - especially for people who do not have a long established credit history.

Types of Credit in Use (Healthy mix) = 10%

·  2 installment loans

·  3 revolving accounts with balances

·  Balances on revolving debt below 30% of the high credit

·  No collection accounts

·  No public records

·  No foreclosures

·  No late payments

How to Improve Your Score

·  Pay all your bills on time or early. Even a 30 day late payment on a small credit card can have a significant negative impact on your scores.

·  Don't co-sign loans - their late payments are yours!

·  Don't close old revolving accounts no longer in use.

·  Don't open new accounts unless absolutely necessary. (Inquiries may or may not affect your score depending on the rest of your credit history.)

·  Report fraud immediately. If you find yourself the victim of fraud, immediately contact the credit bureaus, your credit card companies, banks and the FTC at www.ftc.gov.

·  Monitor your credit. Order a copy of your credit report once a year from www.annualcreditreport.com.

·  If you are planning to refinance or buy a home, do not make any purchases or run up the balances on your credit cards prior to the transaction.


Blog Archive
2016-05-03 14:39:31
Understanding and Improving Your Credit Scores

2016-04-17 18:36:43
Why Aurora Home Values Are Going Up

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