Credit scoring remains as one of the most baffling subjects in the universe. Here’s our attempt to decipher what is important and what is not. Next posting will give you the lowdown on how to improve your score. In the meantime, here’s what’s what!
You should know that credit scores range between 200 and 850. That is quite a range for sure. Did you know that scores above 620 are desirable for obtaining a mortgage. What impacts your score, you ask? Well read below carefully as these are issues affecting your score:
Your payment history:
Do you pay your credit card bills on time? Bankruptcy filing, liens, and collection activity also affect your history.
How much you owe and where:
If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, spreading debt among several accounts can help you avoid approaching the maximum on any individual credit line.
Length of your credit history:
In general, the longer an account has been open, the better.
How much new credit you have:
New credit—whether in the form of installment plans or new credit cards—is considered riskier, even if you pay down the debt promptly.
The types of credit you use:
Generally, it’s desirable to have more than one type of credit—such as installment loans, credit cards, and a mortgage.
If you have any questions about your credit score just hit us up here by adding a comment.
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