Your credit report is a running tally (if you will) of any open or paid accounts that are currently open under your social security number. Your credit score is determined by the following:
Payment History (approximately 35% of your score)
whether you’ve paid past credit accounts on time.
Amounts Owed (approximately 30%)
Owing a lot of money on numerous accounts can suggest that you are financially overextended
Length of Credit History (approximately 15%)
In general, a longer credit history will increase your credit score because it shows that you can responsibly manage your available credit over time.
New Credit (approximately 10%)
Opening several credit accounts in a short period of time can represent greater risk
Types of Credit in Use (approximately 10%)
Your credit mix usually won’t be a key factor in determining your score, but it will be more important if your credit report doesn’t have much other information on which to base a score.
*NOTE* You are entitled to one free "tri-merge" report per year. It's good idea to review your report to check for errors and omissions so that when you're ready to purchase a home you can be confident that you are ready.
ALSO - there are ways to improve your score - and if you check with a lender, often they can assist you free of charge.
For questions - contact me @ MortgageRay@hotmail.com
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