05/21/2024
Here's how credit scores work. In a simple graphic like this, it's easy to see what matters most.
1. Payment History (35%): This is the record of your payments on credit accounts, including credit accounts, mortgages, and other loans. On-time payments positively impact your score, while late payments, defaults, or bankruptcies can have a negative effect.
2. Credit Utilization (30%): This is the ratio of your current card balances to your credit limits. A lower ratio is generally seen as more favorable and can positively impact your score.
3. Length of Credit History (15%): This considers how long your credit accounts have been established. A longer credit history can be seen as more stable and may positively impact your score.
4. Types of Credit in Use (10%): This takes into account the various types of credit accounts you have, such as credit accounts, mortgages, and installment loans. A mix of different types of credit can be viewed positively.
5. New Credit (10%): This includes recent inquiries for new credit and the number of recently opened credit accounts. Multiple recent inquiries or new accounts may hurt your score.
If you're looking to purchase a house or refinance, I can get you a pre-approval pretty quickly in all, but a few states, you can call or text me at 630.292.5754.
