my smile covers up my broken heart just long enough from someone to come and break my smile.
Your credit scores usually determine the price you pay for your money (mortgages, auto loans and leases, credit cards, business loans, etc.). Credit scores range from 350 to 850, with 850 being the best possible credit score you could receive, and 350 being the worst possible credit score.
There are five factors that determine your credit score. To make sure yours is as high as possible, be aware of what contributes to your score and take action accordingly.
Your payment history – 35 percent impact on your credit score. Paying debt on time and in full has a positive impact. Late payments, judgments, charge-offs, collection accounts and bankruptcies have a negative impact. The credit scoring systems evaluate how many late payments you have had and whether they were 30, 60 or 90 days late, or whether they are currently in default, which is the worst situation. Additionally, the systems look at whether the late payments were consecutive.
The balance you owe vs. your available credit lines – 30 percent impact. Keeping your credit balances below 50 percent of your available limit is very important. Keeping your balances below 30 percent of your available credit is even better. Additionally, if you have no debt and no credit lines open or available to you, you will end up with a lower score than someone who has no debt and a few lines of credit available to them.
Your credit history, or how long your accounts have been open – 15 percent impact. The longer your credit accounts have been open, the higher your score will be; newly opened accounts will bring your score down.Free Annual Credit Report
The type of credit you have open – 10 percent impact. A good mixture of auto loans and leases, credit cards and mortgages is always best. Too many credit cards is not a good thing, and having a mortgage does increase your score.
The number of recent inquiries that have been made by creditors – 10 percent impact. Inquiries affect your score for one year from the time the inquiry is made. The reason inquiries have an impact on your credit score is because the scoring system assumes all these inquiries will eventually result in new accounts being opened, and as stated before, the system doesn’t like you to open new accounts and punishes you by giving you a lower credit score.
Under federal law, you have the right to get a free copy of your credit report from each of the nationwide consumer reporting agencies once a year. To order your free annual credit report, call toll-free 1-877-322-8228 or visit www.annualcreditreport. com.
Each month, we’ll ask a local finance expert which questions they most often field. This month’s expert is Sherry Burnett, vice president of mortgage lending at Springfield First Community Bank, 2006 S. Glenstone Ave.
my smile covers up my broken heart just long enough from someone to come and break my smile.
