Credit Clean Up
We see many clients that are surprised to hear that their credit score is not as high as they thought. Now more than ever - your credit score will determine not only your access to credit, but the interest rate you will pay. It is important to know what impacts your credit score, so that you can keep doing the right things and maintain or improve your credit score.
35% of your credit score is determined by paying on time. Even if you can only make the minimum payment - making it on time is important. Late payments - especially if they are recurring will seriously damage your credit.
30% of your credit score is determined by maximizing the use of your credit. High balances result in a lower credit score.
20% of your credit score is determined by your credit limit. If you have access to a lot of credit - even if it is unused, this could limit your access to more credit. Lenders are reluctant to open up more credit unless you close out some accounts to reduce the risk that you will get into trouble with too much access. So, if you have 6 credit cars, keep 1 or 2 and close out the other accounts to clean up your credit score.
15% of your credit score is determined if you shop too much for access credit. If you have too many credit inquiries on your account as you shop for a mortgage, or a loan this will drop your score. This is where a broker can help - only one inquiry into your credit score.
To get a copy of your own credit score (no impact on your credit score) go to www.equifax.com