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This week’s DMR Podcast: 5 Key Factors That Impact Your Score:
For many people who apply for a mortgage, they have no idea of what there credit score is or what it means. Listen in to this week’s Podcast to learn what determines your credit score.
1. Payment History (35%)
It is essential to pay your credit bills on time. Every 30 days late, collection, judgment, or Bankruptcy significantly drops your score.
2. Amount You Owe Compared to Balances (30%)
Your available credit compared to the amount owed. It’s a good rule-of-thumb to be at 40% or less of the available balances
3. Length of Credit History (15%)
Easy rule-of-thumb: the longer your accounts are open, the more positive impact it will have on your overall credit score. In fact, if you happen to have a card that is over 10 years old with even a little activity, it would probably be a bad idea to close that card.
4. Mix of Credit (10%)
Generally speaking, if you have loans, such as a car loan, as well as open credit cards, it helps prove to creditors that you have experience borrowing money.
5. New Credit Applications (10%)
There is a model that compensates for people shopping rates on home and car loans, but it can hurt your credit score to have multiple reports pulled in a short amount of time.
Here are the two credit monitoring services that are mentioned on this Podcast:
1. MyFico.com
David Lukas is an active loan officer and can be reached at David@DavidLukas.com or by calling 501-588-7670. Also be sure to visit www.DavidLukas.com
