A credit score is basically a number representing the a amount of risk involved in lending money to you. Considerations that go into your score: Payment History (35%); Amounts Owed (30%); Length of Credit History (15%); New Credit (10%); and Types of Credit Used (10%).
Fair Isaac Company, or FICO is the most commonly used credit score. The numbers range from 350-900 with the higher numbers deeming you more trust worthy.
Reason Codes are given with your credit score to let you know why yours may be lower than you like.
- Too few accounts currently "paid as agreed"
- Current delinquency (late payments)
- Too many inquires in the last twelve months
- Proportion of balances to credit limits too high on revolving accounts
But not all is lost, there are some things you can do to counteract your score. Fannie Mae recommends
- Strong equity position (large down payment)
- Debt ratios below highest standard ratios
- Excess cash left in the bank after closing
- Successful history of paying housing expenses
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