What is a credit score?

Your credit score is a numerical representation of your statistical likelihood to repay the credit that is extended to you. Your score is a snapshot of a specific moment in time but can and will change with new actions and the passage of time. Credit scores range from 300–850 with 300 being low and 850 being high. The higher the credit score, the more favorable your credit history will be viewed when applying for new credit or applying for a refinance of existing credit.

How is your credit score determined?

There are five main factors that determine your credit score, each one weighing differently.

The five main factors are:

Payment History – 35%

1. Paying debt on time and in full has a positive impact.
2. Late payment, judgments and charge-offs have a negative impact.

Outstanding Credit Balances – 30%

1. Keep balances below 50% of limit – below 30% is even wiser. Do NOT close accounts.
2. Pay outstanding debt down as close to zero as possible.
3. Evenly redistribute the remaining balance among open lines.

Length of Credit History – 15%

• The length of time a particular credit line has been opened is important. A seasoned borrower is stronger.

Types of Credit (Healthy Mix) – 10%

• A mix of auto loans, credit cards and mortgages is positive- rather than a concentration in credit cards only.

New Inquiries – 10%

1. Don’t “over-apply” for credit.
2. Auto and mortgage inquiries receive special treatment, and 20 inquiries can be made in a 14-day period and will be treated as only one inquiry.
3. Each hard inquiry can cost 2-50 points on a credit score.

If you are interested for to credit score for mortgage loan then contact to our loan officers!

Source By: https://www.fairway-newengland.com/credit-score/