Today I'm going to take a brief look at credit score factors. As hard money lenders, credit did not used to make a big difference. Today things have changed, and even in the hard money world, credit is playing a part in lending decisions.
Most people are in the dark when it comes to the factors that determine their credit score. Here is a basic rundown on credit score factors:
35% of your credit score comes from payment history. Late payments, collections, charge offs, repossessions, foreclosures, tax liens, bankruptcies and judgements all fall under this category.
30% of your credit score comes from accounts owed. Credit cards, mortgage loans, auto loans, lines of credit and installment loans all factor into this area.
15% of your credit score comes from the length of credit history, how long your accounts have been open in other words.
10% comes from new credit. This includes credit inquiries, both soft and hard.
Finally, the last 10% comes from types of credit used. A mortgage loan, auto loan, credit cards, etc. The mix of credit used.
IF you would like more information, take a look at our in-depth write up of credit score factors.
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