What determines your credit score?
Whether you have had recent credit struggles, or are just trying to build up enough credit to qualify for a mortgage to purchase or refinance a home, here are some helpful tips...
Your credit score is calculated on information obtained from your personal credit file. This information is then analyzed in five different categories to produce your three-digit FICO® score.
Payment History: 35% of your score is based on paying your credit related accounts on time. Late payments or slow pays can drop your score quickly.
Credit Utilization: 30% of your score is based on how much credit you have and how you are using it. If you are close to utilizing the entire amount of your credit limit on a credit card or line of credit, it can reflect negatively on your credit score.
Length of Credit History: 15% of your score is based on good payment history over a period of time.
New Credit and Inquiries: 10% of your score is based on the number of recent inquiries and opened accounts coming from creditors. If you want to minimize the damage from credit inquiries, make sure that when you shop for a mortgage you do so in a fairly short period of time. The FICO® score treats multiple inquiries in a 45-day period as just one inquiry and ignores all inquiries made within 30 days prior to the day the score is computed.
Types of Credit: 10% of your score is based on having a variety of credit accounts such as a home mortgage, auto loans, credit cards, etc.
Overall the best way you can improve your credit score is to: Correct errors. Pay your bills on time. Pay down your debt. And apply for credit sparingly.
About Heidi
- Heidi
- Utah County, Utah, United States
- Heidi currently works as a realtor in Utah! Heidi has had several careers that range from business owner to radio talk show host. But her first love and interest is homes. Now she is fulfilling a life long dream of being a realtor. She is friendly, honest, helpful and reliable. You can count on her to do what she says she will do! Heidi's area of expertise is primarily in the Utah County area where she has lived and raised her family for 15 years: Alpine, Highland, Cedar Hills, American Fork, Pleasant Grove, Lindon, Orem, Provo, Spanish Fork, and Payson. Heidi takes home ownership seriously and she won't pressure you to buy a home so that she can 'make a sale'! Heidi believes that a home isn't just four walls... it is where you live, learn, love, laugh and grow. It is a place for traditions and family gatherings. She will take time to get to know you and find a home to fill your wants and needs!