A recent report by FICO shows more than 25% of Americans have a credit score lower than 599. With a credit score that low, it makes it very difficult to take advantage of the current record-low interest rates. Below are the main factors, and the percentage of importance of each, that are used to determine your credit score.
1. Payment history = 35% – The most important thing is to pay your bills on time.
2. Amounts owed = 30% – This is the amount of money you owe versus the amount of credit you have available to you. A 20% debt-to-credit limit ratio is optimal.
3. Credit history = 15% – It’s better to keep old credit accounts than to close them.
4. New credit = 10% – Don’t apply for new credit without a good reason.
5. Credit mix = 10% – Try having a good mix of credit, such as credit cards, retail accounts, mortgage, installment loans, and consumer finance accounts.
About Me
- Effective Mortgage Company
- Northridge, CA, United States
- We are a full service mortgage brokerage with experience in the areas of mortgage lending, real estate and business. Our company has established relationships with many mortgage investors and banks to provide the best programs for your individual circumstances. We specialize in Conventional, Goverment, Investment, and Reverse Mortgage. We are experts regarding any FHA or VA (veteran) questions you may have. Post any questions or feel free to call our office 818-773-0033. If our clients don't fit into one of the many loan programs offered we promise to help them overcome the roadblocks that can stop them from securing a loan. When purchasing we suggest always getting a pre-approval early on to have ease of mind knowing what amount you will qualify for and make the loan process as smooth as possible.
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