What is a credit report?
Your credit report is a compilation of your financial transactions, payment history, and personal information summed up into a report.
What is a credit score?
A credit score is created using this information and used to determine if you are a good candidate for a loan, credit card and or other service. Typically, the better you score, the less risk you represent.
Stephanie's Must Know Credit Tips
"Over 70% of consumers identify errors on their credit report. 25% of those are serious enough to deny consumers...access to credit, preferred interest rates, or even a job." [Real Estate Mag. March 2009]
Be careful of making a large purchases right before applying for a home loan. This can result in a denial of a home loan. If thinking of buying a new home hold off on large purchases until after you have closed on the new home.
Breakdown of credit scoring
- Payment History: Impacts your score about 35%. Pay on time and more than minimum payment will help boost your score.
- Outstanding Balances: Impacts your score about 30%. Try keeping you balances less than 45% of the credit limit. Maxing out your credit line will affect negatively on your score.
- Credit History: Impacts your score about 15%. If you have had the same credit holder for a long time, you are considered credit worthy, a strong borrower in other words.
- Credit Type: Impacts your score about 10%. It is best to have a various sources of credit ex. Student loans, car loan, mortgage, and credit cards.
- Inquiries: Impact your score about 10%. Not everyone is aware you can have 20 car loan inquiries in a 14-day period and you can have 3 home loan inquiries within a 90- day period and it will be treated as 1 credit inquiry.
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