Principal Professional Services
For a Consultation Call:
248-515-8653
How Your Credit Score is Calculated and Tips to Help Keep it in Good Standing
A recent report by FICO shows more than 25% of Americans have a credit score lower than 599. With a credit score that low, it makes it very difficult to take advantage of the current record-low interest rates. Below are the main factors, and the percentage of importance of each, that are used to determine your credit score.
1. Payment history = 35% – The most important thing is to pay your bills on time.
2. Amounts owed = 30% – This is the amount of money you owe versus the amount of credit you have available to you. A 20% debt-to-credit limit ratio is optimal.
3. Credit history = 15% – It’s better to keep old credit accounts than to close them.
4. New credit = 10% – Don’t apply for new credit without a good reason.
5. Credit mix = 10% – Try having a good mix of credit, such as credit cards, retail accounts, mortgage, installment loans, and consumer finance accounts.
Karen L. Miller is a licensed Realtor working with NHL Real Estate, in Farmington Hills, Michigan.
Karen provides exceptional customer service to her clients throughout Southeast Michigan, focusing on the unique needs of each of her clients.
Visit www.karenlmillerinfo.homestead.com
Real Estate Services - NHL Real Estate
