5 FACTORS THAT DETERMINE YOUR CREDIT SCORE

How's your credit?! Your mortgage credit score will be different from the credit score you see on websites like Credit Karma. Lenders used a FICO score to determine your credit risk and interest rate. The higher the score, the better!

Let's look at the 5 factors that affect your credit score

Payment History 35%- Payment history defines how consistently you've made your payments on time. Be sure to make all payments on time, now, and forever. If you are going to be late, call the creditor before and let them know whats going on. In some cases they will allow a one time late payment or try to workout a payment arrangement. Don't be afraid to ask for this! You don't want to spend years paying for a small mistake that could have been avoided.

Amounts Owed 30%- The amount owed is your current outstanding debt.

Tip: Keep you credit card usage under 30 percent.

Length of Credit History 15%- If you've had a credit card open for a long time, it makes sense to continue using that card responsibly to maintain a good score. Don't close accounts you've had for a long time. Closing an account will not remove its history from your report. That information will remain on your report for at least seven years.

New Credit 10%- Avoid opening numerous “new accounts” at the same time. Note that inquiries will affect your credit even if you're denied or ultimately decide against the loan or credit card.

TIP: When you are shopping around for rates, be sure to shop over a short period of time. As long as you get all your mortgage quotes within a 14- to 45-day window, the credit bureaus will count these pulls as one single inquiry. So your score won’t be dinged multiple times.

Credit Mix 10%- Your score can increase if you responsibly use different type of credits but it is not required in order to have a good score. Each inquiry affects most people's score by less than 5 points and can stay on your report for up to 24 months.

Having a low credit score should never deter you from wanting to be a homeowner. There are plenty of resources to help. You just have to take action. Execute.. Execute.. EXECUTE.. okay I'm sure you get it now. If credit is holding you back, be sure to sign up for Credit Essentials with Supreme Lending.

CREDIT ESSENTIALS