This was something that just came up in our office this week.  Our assitant is buying a condo and was pleased to find out from her bank loan officer that she would be receiving a lower interest rate on her loan because she had a great credit score.  So it seemed appropriate that I talk a little about that this week.

Did you know that credit scoring was created in the 60's to help bankers figure out if a person would be able to repay their loans. The score ranges from 350 to 850 with a higher score with the higher score being very good.

Credit scores are determined by 5 areas. Payment history accounts for 35% of the score; outstanding credit balances have a 30% impact; credit history makes up 15%, type of credit factors at 10%; and inquiries influence the score by 10%. After taking all these factors into consideration, the loan officer comes up with a determination of how well you will be able to repay your loan. 

To help you figure out how to improve your credit score, I went to Jay Gilmore, our inhouse loan officer for Keller Williams Realty.  And he gave me some pointers to improve your scores:

• Pay down on credit cards
• Do not close credit cards because capacity will decrease
• Continue making payments on time.
• Slow down on opening new accounts
• Acquire a solid credit history with years of experience
• Move revolving debt to installment depth

Here is a list of things that will hurt your credit:

• Missing payments - this takes 24 hours to repair on your credit history
• Don't max out your cards
• Don't close out credit cards
• Shopping for credit excessively
• Opening up numerous trades in a short time period.
• Having more revolving loans in relation to installment loans.
• Borrowing from finance companies.

Hope this information helps you and maybe you will be able to smile like Lora did this week when she got the good news on her loan.