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Credit Score Tips and How They’re Calculated

To increase your credit score and accessibility to a lower mortgage rate, follow these 3 tips:


1️⃣ Use all credit cards and lines of credit.

• Using 15%-30% of your available credit balance demonstrates your ability to spend within your means, without maxing out your available credit.

💲 30% of your credit score is calculated through utilization of your credit card.


2️⃣ Never miss a payment.

• Payment history displays your record of paying debt you owe.

• Missing a payment insinuates more risk for your mortgage lender.

• Pay down your full balance every month, or set up automatic payments so you never miss one.

💲35% of you credit score is calculated through your payment history.


3️⃣ Increase your credit limit when offered.

• When your credit company offers to raise your credit limit or offers you a new line of credit, always say yes!

• Higher credit balances show you have held credit for multiple years and can be trusted using and paying back larger balances.

💲15% of you credit score is calculated through credit history.


💲The remaining 20% of your credit score is calculated through Public Records (10%) and Inquiries (10%).


Although there are mortgage options for clients with all types of credit (even poor credit), having a higher credit score will give you access to Prime A lenders with lower interest rates. Those with lower credit scores can consider Alternative B lenders or Private lenders when purchasing a home.


Credit repair can take anywhere from 6-18 months, to learn more about repairing your credit or how your credit is calculated, let’s connect today!




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