Monday, July 7, 2008

Good Credit Scores

Today’s mortgage market it changing quickly, however, one constant factor is the need to have good credit scores! Here are some great strategies to improve or maintain your credit scores :

Payment History Tips – accounts for 35% of your total score
• Pay your bills on time
o Delinquent payments and collections can have a major negative impact on your credit score.

Amounts Owed Tips – accounts for 30% of your total score
• Keep balances low on credit cards and other revolving credit.
o Don’t close unused credit cards as a short term strategy to raise your score

Length of Credit History Tips – accounts for 15% of your total score
• If you have had credit for a short time only, don’t open a lot of new accounts too rapidly.
o New accounts will lower your average account age and a rapid increase in available credit can look risky to a new credit user.

New Credit Tips – accounts for 10% of your total score
• Note that it’s OK to check request and check your own credit report.
o This won’t affect your credit score as long as you order the report directly from the reporting agency or an organization authorized to provide credit reports to consumers (

Types of Credit Use Tips – accounts for 10% of your total score
• Have credit cards – but manage them responsibly
o Note that closing an account doesn’t make it go away

These are fantastic tips! When credit is used responsibly your scores will reflect the positive payment history that you are working so hard to prove! Remember, a mortgage lender will scrutinize your credit history as well as other factors when applying for a loan. Stay informed, make good credit choices and you will reap the benefits!

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