Credit is tied to most big financial decisions you will make in your life. From things as little as opening up a store card at the mall to buying your first home, your credit score is going to play a factor. When it comes to mortgages, lenders take your credit score, particularly your FICO score, into consideration in determining the interest rate that you will likely be stuck with for years. How is your credit score determined and what can you do to use it to get a better rate on your mortgage? We'll cover all of that and more in this article.
You may think your credit is perfect because you pay your bills on time and never miss a payment. If you are having trouble getting a loan and don't know why, it could be that your credit habits are scaring away lenders. Here are some items that may be lurking in your credit report that are making lenders leery: Multiple Lines of Credit If you have a lot of open credit cards this can be a bad signal to lenders. Lenders see this as an indication that you might be having financial difficulty. Credit Inquiries Lenders also don't like it when you inquire about new lines of credit. Applying for credit can have a negative impact on your credit score. Every time you allow a potential lender to pull up your credit report, your score can take a small hit. Co-Signing a Loan When you co-sign for a loan that dept becomes your debt and shows up on your credit report. Potential lenders look at that debt as yours because you are ultimately responsible for it. If the person you co-signed for stops paying, pays late, or misses payments, your credit report can be negatively impacted. Making Minimum Payments Lenders who view your credit report don't like to see that you are paying just the minimum payment. If you consistently pay the minimum payment due, it could indicate financial stress or confirm that you are unable to pay off the full balance.
Your credit score impacts many of your important life decisions. From your ability to open new credit cards, to taking out loans for cars and houses, your credit will be checked by many companies throughout your life. Credit scores are mostly a mystery to the people who have them. Sure, you can check your credit score for free online, but when it comes to understanding your score, most consumers are in the dark. In a perfect world, we would be taught in high school and college exactly what goes into your credit score, how to build credit, and how to avoid credit missteps. Unfortunately, we don't live in that world and many of us don't find out what makes up a credit score until we're in debt from student loans or credit cards. In this article, we'll teach you what a credit score is, what it consists of, and how it is affected by your financial decisions. And, we'll do it in an easy-to-understand way that skips all of the jargon and acronyms that are used by banks and lenders. Read on to learn everything you need to know about your credit score.
When you are looking to buy a home or refinance it is important that your credit is in tip-top shape. It is often a credit score that gets in the way of a home buyer and their dream home. Credit today means everything as far as your purchasing power. So if you want to be ready when opportunity knocks read on for some for smart ideas on how to keep your credit score going up.
Did you know your credit score is always changing? Your credit score could be one number on one day and a different figure the next and even vary from one credit reporting agency to the next. Your credit score also known as your FICO score is based on the information contained in your credit record. Since your credit file is always changing so is your score. Your credit record changes every time a company you have credit with reports an on-time payment — or more important, a missed payment that's now more than 30 days late. Your score changes each time your credit card balance changes or you apply for new credit. There are three main credit reporting agencies; Experian, TransUnion and Equifax. Another factor that could affect your score is that not all lenders report to all agencies. To know your credit score you can pull a free credit report from all three agencies once a year. Look for missing or incorrect information. It is important to get that resolved as soon a possible. Click here for more information on obtaining a free credit report.