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5 things you should know about your credit score
How do the three credit agencies determine your credit score?
- 10% type of borrowing involved
- 35% payment history
- 30% amounts owed
- 15% length of borrowing history
- 10% new borrowing taken out
What are your mortgage benefits with a good credit score?
The higher your credit score, the lower the interest rate you are charged when borrowing. The credit agency scoring also determines whether or not you are approved for a mortgage or mortgage insurance. The better your score, the lower the rates you pay.
How do I improve a poor credit score?
Your first step to analyze your credit standing is to verify your credit report is accurate. Every year, you need to pull a free copy of your credit report at www.annualcreditreport.com.
How long will negative items stay on your credit report?
Foreclosures remain reported for 7 years and negatively impact a score between 85-160 points. Chapter 13 bankruptcies are reported for 7 years; Chapter 7 bankruptcies for 10 years. Both reduce your score by about 130-240 points. 30-day mortgage delinquencies reduce a credit score by 60-110 points, and the impact is higher for 60- and 90-day delinquencies.
What are some tips for maintaining a good credit score?
- Set up automatic bill payments to pay on time every time.
- Develop a budget. Try free budgeting software online like Mint.com or find strategies that work for you.
- When you’re having trouble making ends meet, contact your creditors to modify your repayment schedule.
- Build on timely payments you’re already making by opting in to your landlord reporting only positive rental payments to a credit agency on your behalf.
