Credit Scores

 

Get to know the credit information used by lenders to qualify you for a mortgage.

Credit scores are one of the most important factors in determining which loan programs borrowers qualify for.  Credit scores can range from 350-850 and are composed of:

  • 35% payment history
  • 30% amount of debt you have
  • 15% length of your credit history
  • 10% type of debt you have (revolving, installment, mortgage)
  • 10% whether or not you have a lot of new accounts

You can improve your credit score by:

  • Paying bills on time
  • Do not max out credit cards or other revolving debt plans
  • Do not open many new accounts, or apply for many new accounts in a short period of time.
  • Do not close accounts, especially ones that have been open for a long time, even if they have a zero balance
  • Check your credit report annually to ensure accuracy

Excellent Credit 720-850

  • Credit scores of 720 and above
  • At least 5 trade credit lines which have been opened for at least 24 months
  • All accounts have been paid as agreed
  • No public records of bankruptcy, foreclosure, serious past due accounts or collections within the last 10 years
  • Low current credit balances relative to maximum available credit limit
  • Minimum number of credit inquires

Very Good Credit 680-719

  • Credit scores between 680-719
  • At least 5 trade credit lines which have been opened for at least 24 months
  • All accounts have been paid as agreed
  • No public records of bankruptcy, foreclosure, serious past due accounts or collections within the past 7 years
  • Low current credit balance relative to maximum available credit limit
  • Minimum number of credit inquiries

Good Credit 620-679

  • Credit scores between 620-679
  • At least 5 trade credit lines which have been opened for at least 24 months
  • Most accounts have been paid as agreed with only occasional late payments
  • No public records of bankruptcy, foreclosure, serious past due accounts or collections within the past 10 years
  • May have significant credit balances relative to maximum available credit limit
  • Several recent credit inquiries

Fair Credit 580-619

  • Credit scores between 580-619
  • At least 3 trade credit lines which have been opened for at least 24 months
  • Most accounts have been paid as agreed with only occasional late payments
  • No public records of bankruptcy, foreclosure, serious past due accounts or collections within the past 10 years
  • May have significant credit balances relative to maximum available credit limit
  • Several recent credit inquiries

Poor Credit – below 579

  • Credit scores below 579
  • One or more accounts have not been paid as agreed
  • May have had a bankruptcy, foreclosure, serious past due accounts or collections
  • High number of recent credit inquiries
  • Proportion of revolving balances to revolving credit limits is too high