Do we really understand how our credit scores are figured? Some of us think if we have little to no credit that helps keep our scores high, some think having a lot of credit lines helps keep them high and some of us really don't understand what goes into a credit score. If you fall into that last group, it's time you find out. This affects everything from buying a home or car all the way to how much your homeowners and car insurance costs.

Here's a break down of how our scores are created:

1. Payment history- 35%.  This takes into account both adverse payment history as well as time they have been open and if they were ever late.
2. Amounts owed- 30%.  They take into account the amount owed in relationship to the total limit and even the lack of balances
3. Length of credit history- 15%.  How long have you had an account and what activity you've had on the accounts.
4. New Credit- 10%.  Not a big determining factor but you would not want to have a lot of "new credit lines" in a short amount of time.
5. Types of Credit Used- 10%.  Another small factor but having a lot of any one type (credit cards, loans, etc.) is not a good thing.

There are many factors when it comes to figuring your credit score but one thing's for sure-you want your score above 680. Most mortgage companies are raising the minimum score to aquire their best programs with the lower rates. Recent changes in the lending world even penalizes you if you are below that score.

For more on how to improve your credit score pelase email me at Jay@ValleyREAdvisor.com and I'd be happy to send you a detailed list of items that will help.