818 Mortgage Home Loan Specialist

Question: what factors impact your credit score?

1. Payment History 35%

Let's be clear, the #1 factor is: paying debt on time. Things like: late payments, judgments and charge-offs negatively impact your score. FYI: the higher value of any missed payment the more severe impact. But this is not the only factor, lower payments, and delinquencies also negatively impact your score.  Recent missed payments have a greater effect on your score than older ones.

2. Balances 30% 

The ratio between your outstanding balance and available credit. Ideally, balances are below 30% of your maximum available credit limit. In some cases, up to 49.99% of your max can have little to no impact. 

3. Credit History 15%

This is the length of time since each credit line was established. Longer established lines are typically better.

4. Types of Credit 10% 

A mixture of auto loans, credit cards and mortgages is more positive than a concentration of debt in only one form.

5. Inquiries 10%

How many inquiries have been made during a six-month period (typically). Each hard inquiry may have a 2-25 point change. The max effect for inquiries is ten. Simply, 11 or more inquiries within a six-month period will have no further impact. FYI - if you run a credit report on yourself, it will have no effect.

*Not a guarantee, these 5 factors are typically correct in most scenarios.  Consult Marcel at 818 Mortgage for the most up to date information.

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