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May 25th, 2018 

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Credit Rating

Credit Rating - How it Affects Your Mortgage
Lenders analyze your credit scores to determine whether or not to  approve a home mortgage, a car purchase and nearly all other types of  loans. Before lending you money, creditors want to determine how much of a risk  you are—in other words, how likely you are to repay the money they loan  you. Credit scores help them do that, and the higher your score, the  less risk they feel you'll be.
Most increases to your credit scores take place over time and require an  ongoing effort from you. The only true credit score quick-fixes are to  pay down debt and to successfully dispute negative information on a  credit report.
Credit scoring software looks at five areas of your credit reports:
Your Payment History Amounts You Owe Length of Your Credit History Types of Credit Used Your New Credit You can improve your credit scores by taking a close look at your credit  reports and charting a plan of action to improve them.
Improve Your Payment History
Always pay your bills on time. Late payments play a major role in  driving down your score. If you have past-due bills now, get current and stay that way. Contact your creditors as soon as you know you will have a problem  paying bills on time. Try to work out a payment arrangement and  negotiate with them to keep at least a portion of the late notations off  of your credit reports. If your situation is serious, see a legitimate, non profit credit  counselor. Avoid the scam artists who promise a quick reversal of your  credit problems. Keep Debt to a Minimum
Keep your credit card balances low. High debt-to-credit-limit ratios  drive your scores down. Pay off debt, don't move it around. Owing the same amounts, but having  fewer open accounts, can lower your score if you max out the accounts  involved. Don't close unused accounts, because zero balance might help your score. Don't open new accounts that you don't need as a quickie approach to  altering your debt-to-credit-limit ratios. That can lower your score. Length of Your Credit History
Time is the only thing that can improve this aspect of your scores, but  you can manage it wisely: Don't open several new accounts in a short period, especially if your  credit history is less than three years. Adding accounts too rapidly  sends up a red flag that you might not be able to handle your credit  responsibly. Manage New Credit Wisely
Several credit inquiries during a short period means you are attempting  to open multiple new accounts, and that lowers your credit scores. Credit scoring software usually recognizes when you are shopping for a  single loan within a short period of time, such as a home loan. If  multiple inquiries are necessary, have them pulled as closely together  as possible. Checking your own credit report does not affect your scores. Do try to open a few new accounts if you've had credit problems in the  past. Pay them on time and don't max out your credit limits. The Types of Credit You Use
A mixture of credit cards and installment loans, loans with fixed  payments, can help raise your score if you manage the credit cards  responsibly. Having many installment loans can lower your scores since payments  remain the same until balances are paid in full. Don't open new accounts just to have several accounts or to attempt a  better mix of credit. Closing an account doesn't remove it from your report. It may still be  considered for scoring purposes.
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