2. Don’t co-sign loans. Their late payments are yours!
3. Don’t close old revolving accounts no longer in use.
4. Don’t open new accounts unless absolutely necessary. (Inquiries may or may not affect your score depending on the rest of your credit history.)
5. Report fraud immediately. If you find yourself the victim of fraud, immediately contact the credit bureaus, your credit card companies, banks and the FTC at www.ftc.gov.
6. Monitor your credit. Order a copy of your credit report once a year from www.annualcreditreport.com.
7. If you are planning to refinance or buy a home, do not make any purchases or run up the balances on your credit cards prior to the transaction.
8. What makes up your credit score:
A. Payment history = 35%
- Do you pay your credit on time?
- Length of positive credit history
- Severity and quantity of delinquencies
B. Amount owed = 30%
- Quantity of credit Accounts too many credit cards with balances can lower a score.
C. Length of credit history= 15%
- The longer the history, the better.
- How long have your credit accounts been established?
- How long has it been since you used certain accounts?
D. New Credit = 10%
- Research shows that opening several credit accounts in a short period of time does represent greater risk especially for people who do not have a long established credit history.
E. Types of Credit in use (Healthy mix) = 10%
- 2 installment loans
- 3 revolving accounts with balances
- Balances on revolving debt below 30% of the
- high credit
- No collection accounts
- No public records
- No foreclosures
- No late payments
Mortgage FAQs