How is your credit score calculated?

Knowing what goes into your credit score empowers you to manage it.

When you’re planning to buy  a home and you are ready to apply for a mortgage,  your credit score plays a big part in your approval, it can also affect the interest rate you receive as well. Do you know what goes into the calculation of your score?

The FICO Score is considered the industry standard, meaning most lenders use this score in factoring your qualification.  Knowing which factors are used to calculate your score is key for making sure that it accurately reflects your ability to repay a loan. The chart above shows you how it’s calculated and defines what each of those categories mean.

The biggest percentage that affect your scores calculation is 1) your payment history and 2) the amount of debt you owe. The other arts included are the length of time you’ve had each credit account, how many new credit accounts you have and how many different types of credit lines you have (student loans, credit cards, bank lines of credit, car loans etc).

If have questions about your financial standing or are looking for a mortgage preapproval or refinance, get in touch with us and we will point you in the right direction.

 

Join The Discussion

Compare listings

Compare