THE BASICS

Why does your credit score matter?

Simply put, the higher your score, the easier it will be for you to qualify for larger amounts of credit at lower interest rates.  

Right now, there are three big players in the credit rating game: Equifax, Transunion and Experian.  Every time you apply for credit or a loan or make payments on credit cards and loans, you're building a credit history that is logged by the "Big Three."  They all tract the same data: 

  1.  The number of times you request credit
  2.  The number of accounts you open and close
  3.  Your payment history
  4.  The amount of credit debt you have
  5.  The total amount of credit available to you

"BIG THREE"

 

FICO SCORE

All of this information is crunched into what is known as your FICO score.  The higher your FICO score, the easier it will be for you to qualify for the credit you want, at the best interest rates.

Over 75% of mortgage lenders and 80% of the largest financial institutions use FICO scores in their evaluation and approvals process for credit.

 

Determining Your FICO Score

 
  1.  35% of your FICO score is determined by your payment history.  On-time payments build your score whereas late payments hurt it.
  2.  30% of your FICO score is determined by comparing the amount of credit you owe to the amount you have available.  Lenders are wary of people using too much credit, as statistics show they;re more likely to miss payments.
  3.  15% of your FICO score is based on the length of your credit history.  It's important to keep your accounts open.
  4.  10% of your FICOs core is determined by the number of new accounts you open.  Opening a new account temporarily lowers your credit score for 12 months.
  5.  10% of your FICO score is based on the type of credit you use.  Lenders like to see a mix of card accounts because statistics have shown that having too many accounts of the same type slightly increases the risk of a person not being able to make timely payments.
 

Each scoring agency uses slightly different formulas for arriving at your credit score, but all three uses a score ranging in value from 350-50, which changes month to month based on your credit activity.

Also there aren't any hard and fast rules, here's how lenders generally look at your scores:

WHAT DOES IT MEAN?

<570

Serious risk

570-619

High Risk

620-679

Decent Credit

680-719

Good Credit

>720

Great Credit

 

WE CAN HELP

Is your credit score at serious risk?  Do you want to increase your credit score to get lower interest rates?

If you're more than 30 days late on your mortgage or have collections or student loans, we can help you.  Whether it's bankruptcies, repossessions, or judgements, our team of experts will help you understand and increase your credit so you have more financial freedom.  

 

A new hope for your future, awaits.

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