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Credit Score

Your credit score is one of the primary tools a creditor uses when determining the risk in lending money to you. Creditors use your credit score, among other things, to determine whether or not to grant you credit and, if so, how much credit and at what rate. Creditors will also access and consider your credit report, which can provide further substantiation on a given component of a credit score that could affect their final decision. However, as most credit decisions are made very quickly, it is a credit score that is most often used.
The strange thing is not every consumer has a credit score. There are certain situations where a credit score cannot be calculated because one or more of the following has occurred:

• Your credit report does not contain at least one account
  
  
• A remark on one of your accounts references a person who is deceased
  
  
• The Social Security number on your credit report matches a Social Security number in the Social Security Administration's "Death Claim Index"

How Your Credit Score Is Determined:

1. Payment History: Approximately 35% of your score.
2. Amounts Owed: About 30% of your score.
3. Length of Credit History: About 15% of your score.
4. Pattern of Credit Use: About 10% of your score.
5. Types of Credit in Use: About 10% of your score.

Credit Score Guidelines

650 and Above

In general, a score of 650 or above indicates a very good credit history. People with these scores will usually find the loan process quick and easy, and will have a good chance to obtain a loan at a relatively low rate of interest.

Scores between 620 and 650 indicate basically good credit. (Average FICO scores fall into this range.) People with scores in this range have a good chance at a loan at a good rate, but may have to provide additional documentation and explanations to the lender before the loan is approved.

A score below 620 may prevent a borrower from getting the best interest rates, as they may be considered a greater credit risk-but it does not mean that mortgage funding can't be found.

We encourage you to search for a free credit score. Visit our home page to get a free credit report with a free credit score.

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