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Credit scores fall within the following range: 200-800. Scores above 620 are considered desirable for obtaining a mortgage. It is possible to get a mortgage with a lower credit score, though generally these loans are far less favorable to the buyer. I have listed five factors which will affect your score.
- Payment history — whether you paid credit card or loan obligations on time.
- Debt. The amount of debt and the number of accounts the debt is under are key contributing factors.
- The length of your credit history. As a rule of thumb, the longer the better.
- How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay promptly.
- The types of credit you use. Generally, it’s desirable to have more than one type of credit—installment loans, credit cards, and a mortgage, for example.
For more on evaluating and understanding your credit score, go to http://www.myfico.com .
