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Understanding Credit Scores
Understanding Credit Scores
Understanding Credit Scores - Credit scores can make you or break you when it comes to getting a loan. This video explains how your credit score is determined and what it can mean to your mortgage payments.
A borrower's credit score plays a big part in their life. It can determine whether or not they can receive a loan, how much they'll pay for that loan, and (in some cases) whether or not they can get a certain type of job. Credit scores are determined by the three major credit bureaus and are reported based on characterstics of the individual borrower.
Most people fall in the 600-800 credit range with 650+ being good, 700+ being excellent and 620 or below being poor. A person's credit score is determined by their credit history (35%), the amount they owe (30%), the length of time they've had credit (15%), recent new credit (10%) and the type of credit they use (10%). The biggest factors are an individual's credit history (whether or not they paid their bills on time) and the amount they owe.