Basic Credit Scoring Tips For A Better Mortgage Rate
Credit scoring is becoming more important to mortgage pricing so now would be a terrific time to brush up on your credit education. If you understand how the system works, after all, you can make it work to your advantage. One terrific place to start your research is at myFICO.com.
Equifax is one of the primary credit bureaus and is the publisher of my FICO.com. This site provides a wealth of suggestions, tricks and tips that will help you figure out the credit scoring system.
Following are some of the basics:
Use your credit or lose your score: You need to get on the credit “bandwagon” if you want a credit score assigned by the credit agencies. Even if you charge a small amount and pay it off each month, you’ll be on the radar and have a score.
30 Is The Magic Number: Holding your credit card balances below 30 percent of their respective limits shows an ability to manage credit responsibly. Before consolidating multiple credit cards onto one credit line, consider that card’s credit limit. Overload it and the consolidation could hurt your credit score.
The Trend Is Your Friend: A track record of paying accounts on-time means that you’re likely to continue paying on-time. Credit bureaus like on-time payments. If you’ve been late, catch up immediately. At 35 percent, this is the largest component of your credit score.
History Is The Best Teacher: Don’t close unused credit cards. Having a credit “history” accounts for 10 percent of your score.
There are more helpful hints available at the Web site so with additional credit score adjustments to mortgage rates expected later this year, the best way to protect yourself is to be proactive. Identify potential issues in your credit profile and work to improve them.
We all want the best mortgage rate possible, but are not always clear about the best way to get credit scoring formation . Please speak with your loan officer about getting the personal information that you need.
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