(760) 622 5087 [email protected]

The relationship between your credit score and loans available is a direct one. How good of a job you do to maintain your credit directly affects how much you can borrow, at what interest rate and with how much of a down payment. Given the importance of this numerical score, it is in your best interest to understand as much as possible of how the score is determined.

Payment History 35%

This one is all about making your debt payments on time and in full. The more consecutive on-time payments you have, the more your score will go up. If you were late with one or more payments, this needs to be in the distant past as the last two to three years are given the most importance.

Outstanding Debt  30%

How much debt you have, especially given your income, is a big factor that you can remedy the fastest if your score is low. Simply paying down or paying off a loan(s) will help tremendously. If you have credit card debt, start by getting it down to less than 50% of your credit limit. Then work on getting it down to zero and watch your score jump up.

Credit History Length 15%

If you are new to the world of credit, you can only be patient  and make sure you use it wisely and pay your monthly obligation in full and on time.

Pursuit of New Credit  10%

While your attempts to get additional credit can add a few points to your credit score, do so carefully. If you make the mistake of applying for every card in sight, you will get flagged a credit risk simply because people do not usually seek credit so aggressively. That is, unless they intend to skip out on it.

Credit Mix 10%

Having a mix of types of credit (e.g. a car loan and a credit card and something else, like a mortgage) is far better that simply having a dozen credit cards.

If you’d like to discuss credit score and loans, contact me at 760 622 5087 or [email protected]