Top Factors Influencing Your Credit Score

At this time of year, especially if we were extra generous with our gift giving, it’s important to review the top factors that can lower our credit scores.  Please also see “Tips to Improve Your Credit Rating” on the left in this issue of the Mortgage Financing Journal.   1.     There are too many consumer finance company accounts on your credit report.  Having too much available credit can hurt your score. If you have several consumer accounts try to consolidate those balances and close the accounts.   2.     Your account balances are too high. As a rule of thumb keep your credit card balances below 35% of the available limit. High balances ongoing will negatively affect your credit score.   3.     There is not enough recent revolving account information on your credit report. Using your credit cards regularly is an important part of building healthy credit.   4.     There have been multiple lending institutions pulling credit reports on you.  This is part of the advantage of using a Mortgage Broker; we pull one credit report and then go to several lenders vs. having several lenders each pulling your credit bureau.