Below is a list of information that can help increase your credit score. A good credit score is very important when applying for a mortgage. You are open to many opportunities when you credit score reflects as excellent. Perks include getting the best interest rate on your mortgage, getting a mortgage with no down payment, having more lenders to choose from, etc.
A few quick tips on how to manage/improve your credit score:-
- Equifax and TransUnion are two major companies holding your credit reports.
- Credit scores range from 300-900, a zero down mortgage requires a credit score of at least 680
- Your payment history accounts for 35% of your credit score. Making payments on time ensures a higher score
- If you have amounts owed, this accounts for 30% of your credit score. If you don't want maxed out credit cards affecting your score, it's best to use only 75% of your given credit limit. E.g. If your credit limit is $5000, don't use more than $3750 or it will affect your score.
- How long have you had your loan or credit card(s)? Length of Credit history is worth 15% of your score.
- Newly activated credit accounts, or having your credit checked too often can lower your score. New credit accounts for 10% of your credit score.
- If you have several credit cards with high limits, it's easy to max these out since you don't need re-approval to reach your maximum limit. Types of credit you use are worth 10% of your score.
Click below if you would like assistance from one of our RealEstateProNet Mortgage Specialist. Consultation is always FREE. For a free credit check to see where you stand, just mention so in the comment section.