5 Traits of People with Excellent Credit Scores

If you have a FICO score of 785 or higher, congratulations! You are among the small group of people who are dedicated to making sure their credit stays strong and healthy in order to maintain excellent credit status. If your not a 785, don't despair but before you finance a home do these 4 things.

Here are a five recommendations to help keep you on track:

Don't Miss Payments

Avoiding late or missed payments will have a positive affect on your credit score. According to Experian, 96 percent of people with excellent credit have never missed a payment at all! If you do miss a payment, late payments that are over 4 years old will not affect your score as much as a more recent late payment. 

Avoid Late Payments of 60 Days

The older the late payment becomes, the less effect it will have on your credit score. The bureaus generally look at late payments of 60 days or more. Experian reports that people with excellent credit scores have never had a 60 days late reported on their credit. 

Good Standing of Accounts 

This one is pretty obvious but making sure your accounts are being paid on time and as agreed is a must. This equates to accounts that are in good standing. People with excellent credit have an average of 6 accounts that are being paid as agreed. 

Amount of Available Credit

The credit bureaus like to see a good mix of credit cards (also referred to as revolving credit,) installment loans (loans in which you make the agreed payment over a period of time, such as a car loan,) and mortgages. Showing responsible and consistent payments show less risks to lenders. However, having too much credit usage can become a problem. People with high credit scores use less than 6% of available credit. Take note that consolidating or moving debt from one account to another usually does not change this ratio.

Length of Credit History

The higher the average age of your credit accounts, the better. For example, people with an excellent credit score have at least one account that is on average 25 years old. As you age, obviously the longer your credit history becomes. But on top of this, having "aged" accounts and restricting yourself from opening new accounts shows less risk to lenders. 

Learn more about Why Your Credit Score is Important When Buying a Home.

If you have questions regarding your credit or whether or not you qualify for a home loan, please call/text me at 760-574-8486.