What Affects My Credit Score?

May 13, 2013
Spring Garden home for sale

Pre-qualification for a home loan will help you determine if you are capable of purchasing new real estate, and if so, what size of a real estate transaction you are capable of preforming. One of the major aspects that effect your ability to get a home loan pre-qualification is your credit score. 35% of a person’s credit score is determined by credit history, types of credit used, and new credit. The length of your credit history is the total length of time tracked by your credit report, but it also includes the length of time since an account was opened and the time that’s passed since its last activity—though it sounds counterintuitive keeping credit cards that you’ve had for a long time open once you’ve paid them off builds positive credit, where closing that same card might actually work to your detriment.

Related Report: What’s a Good Credit Score?

The types of credit you use are as important as the length of term you’ve held them. Each credit reporting company is different in their grading system, by generally a mixture of account types (installment, revolving, mortgage, etc.) reflects better than a report with only revolving accounts (credit cards). New credit findings include new accounts you’ve opened, new accounts versus total accounts, new credit inquiries, length of time between new inquiries and new accounts and re-establishment of good credit following a history of payment problems. Understanding how your credit history, the types of credit you use and your new credit activity affect your overall credit score is the cornerstone to building and maintaining good credit, which will help you to pre-qualify for a home loan. 

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