Your credit score is one of the largest contributors toward your loan approval. This three-digit number is compiled with information from your credit profile factors in various attributes from your credit history. What can improve or damage your scores? The most important piece to the puzzle is your payment history. Accounting for 35% of your score looks at when you've made payments to your credit accounts. Paying when due will gradually increase your score yet paying more than 30 days past the due date will decrease that same score.
The next contributor accounts for 30% of your score and compares the amounts owed with the credit limit. You can already tell that just these two factors make up nearly two-thirds of your total score. By concentrating on these two areas alone will keep credit scores on the rise. But there may be a couple of misconceptions about the impact of account balances. These two concern the balance in its entirety. Is it better for your scores if you pay your credit accounts down to zero each month after using credit or is it better to carry a balance? The answer might surprise you.
To learn more about carrying a balance or not and how to buy a house, check out the SCOOP! Blog
Comments(2)