Credit, Credit, Who's Got Credit?

Some people are re-examining their use of credit, especially as the all-important Holiday shopping season is upon us. The cost of credit has skyrocketed of late as credit card companies ratchet up charges before the new federal law goes into effect in February 2010 that curtails companies' ability to raise rates at will. So here's some food for thought. Credit scores are calculated from a lot of different credit data in a credit report. This data can be grouped into five categories. Payment History is 34%; Length of Credit History is 15%; New Credit is 10%; Types of Credit Used is 10%; and Amounts Owed is 30%. A credit score takes into consideration ALL these categories of information, not just one or two. The importance of any factor depends on the overall information in your credit report. Your score only looks at information in your credit report. However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit that you are requesting. Your score considers both positive and negative information in your credit report. Late payments will lower your score but establishing or re-establishing a good track record of making payments will raise your score. If you want to improve your credit so that you can qualify for the best home loan rate, contact me and I'll put you in touch with a great mortgage consultant who can help you put a plan together so that within a year, you're likely to be able to qualify for a good loan, barring things like bankruptcy and law suits on your record. Keeping good credit is a piece of cake once you've cleaned your old credit report up.