With the tightening of the credit supply due to the real estate market downturn, it is more important than ever to know your credit score.  Your score will in large part determine what type of mortgage loan program you qualify for and the interest rate you'll pay.  This, in turn, will determine whether you're able to buy that home you've fallen in love with.

Credit scores range between 200 and 850.  While scores above 620 are considered desirable for obtaining a mortgage, to get the best interest rates you need a score at or above about 720.  The following factors affect your score:

Payment History

Do you have a history of paying your credit obligations on time? If they were late, then how late? Have you filed for bankruptcy?  Liens and collection activity also impact your score.

Amount Owed

If you owe a large amount of money on a large number of accounts, it can indicate that you are overextended. However, if the balances on those accounts is 40% or less of the total credit limits, that's a good thing.

Length of Credit History

In general, the longer you have had accounts open, the better.  This shows that you have been managing credit for some time which gives the lender a picture of how you might handle it in the future.

Amount of New Credit

New credit, either installment payments such as an auto loan or new credit cards, are considered riskier even if you pay them promptly.

Types of Credit

Generally, it's desirable to have more than one type of credit - installment loans, credit cards, and a mortgage, for example.

Over time, you can improve your credit score by doing the things in these five areas that will make you a more appealing risk to a mortgage lender.

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You're at Home with Heather
Shreveport and Bossier City, Louisiana Real Estate

Shreveport Home Connection
Coldwell Banker J. Wesley Dowling & Assoc. LLC

Serving your real estate needs in Shreveport, Bossier City, Benton, Haughton, Keithville, Stonewall, Blanchard, and Barksdale AFB

Licensed in Louisiana