How to Improve your Credit Scores

Posted on May 3, 2011

Dan Chapman

Dan Chapman

  • Loan Officer | Lic #: MLO-70767
  • Phone: 661.295.4686
  • danc@legacyg.com
  • clear employee

 As you may know your credit score is an important factor in determining the overall cost to your mortgage loan. Interest rates are priced based on the middle of your 3 credit scores. The 3 major credit bureaus have an automated system that determines your credit scores based on several primary factors.

The factors are:

  • 35% is based on your payment history for all your accounts
  • 30% is based on the amount you owe on revolving accounts like credit cards
  • 15% is based on how long you have been using credit
  • 10% is based on your applications for new credit
  • 10% is based on the type of credit used

How can Credit scores be improved?

  • Bring past due accounts current and pay them on time.
  • Keep balances as low as possible on your revolving accounts a good rule of thumb is below 30% of your credit limit.
  • Do not close existing accounts, this can in most cases lower your scores.
  • Request correction letters for any information reported in error.
  • Limit applications for new revolving debt such as credit cards or department stores....

Keep in mind if you have bad credit, I can help you with a plan to change that and improve your scores dramatically so that you can put yourself in a position to get the best interest rates on the market today. This can save you thousands of dollars over the life of a mortgage loan.

Your Personal Lender,

Dan Chapman