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I make my payments on time. Why do I have a low credit score?
 
This question is asked often when I have people apply for a new mortgage and with good reason. You might believe that if your payments were made on time that should give you at minimum, a good credt score.
Not Always True!
 
Credit scores are composed of multiple pictures of your financial health and then rated on your "credit report", while making payments on time is VERY IMPORTANT, these other factors can improve or worsen your scores as well. Read on.....
 
There are several reasons a credit score may be low even if the payments are on time, but I will write about the most common cause that I have seen by doing a comparison of 2 families.
Example:
 
Client A: Has a 150K mortgage that has been paid on time since the home was purchased 4 years ago.   
An Automobile payment of 260.00 per month paid on time since it was purchased 3 years ago
4 credit cards all paid on time(all over 2 years old). 
Card 1 Balance= 250.00      Credit Limit= 5000.00
Card 2 Balance= 199.00      Credit Limit= 2500.00
Card 3 Balance= 125.00      Credit Limit= 4,000.00
Card 4 Balance= 900.00      Credit Limit= 10,000.00
                                                                     VS
Client B: Has a 140K mortgage that has ... more

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