Capital View

Thoughts and Ideas on the Mortgage Finance Industry from David H. Stevens, President and CEO Mortgage Bankers Association

Having & Maintaining Good Credit

15252_blog_image_bus_woman1I recently received an email alert from the credit reporting agency that I have a subscription with alerting me to the fact that my score had changed. For anyone who doesn’t have a subscription to a service that monitors your credit rating, I strongly recommend considering this – or at minimum scheduling a quarterly check with a free credit reporting service. Why? Simply because your credit score means a lot, whether looking for a job, renting or buying a home, or the rate charged on your credit cards.

I was pleased to find that my alert this morning was to tell me that my credit score had risen. But the most important thing was reading the reasons as to why the score was higher. You see, it’s not just about paying on time. There are many other variables to a score that are of particular importance, especially to younger people who are just securing credit of some form.

Take a look at the explanation below for my higher score. For additional resource information check out the CFPB‘s (Consumer Financial Protection Bureau) site as well HERE>

1. No serious delinquency: There is no evidence of a serious delinquency (60 days past due or greater) or derogatory description on your credit report.

2. Low credit usage: You’ve limited the use of your available credit

3. Bills paid on time recently: You’ve recently been paying your bills on time.

4. Long credit history: You have an established credit history.

Learning about credit is really important, and especially so for young professionals entering the work force. Paying on time is of course absolutely important, but how much of it you use, and how long you have had credit weigh heavily as well.

For example if you have a $5,000 credit line on a credit card, try to keep your outstanding obligation less than 50% if you can.

For additional help, here is one credit scoring systems way of looking at credit today:

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