Credit Scores

Did you know your credit score is made up of five components? Each component influences a percentage of your credit score.
Here they are, along with a suggestion to help with each one:
Elements of your credit score
1. Paying on time (35 percent): If you have any late accounts, you will want to bring them current as soon as possible. Pay any past-due items and don't miss any payments going forward.
2. Amount and type of debt (30 percent): You should try to get each balance owed on a credit card or loan to be as small a part of the maximum as possible.
3. Length of time you have been using credit (15 percent): Your credit history lengthens as you get older, but accurate, negative information stays on your report for seven years. Even so, positive accounts (those "paid as agreed") that have been open for at least two years on your credit report will help your credit score.
4. Variety of accounts (15 percent): It will help if you can show that you can handle more than one type of credit. Adding different types of loans like an installment loan or a car loan will help. You essentially borrow money that is backed by a savings account and make regular monthly payments to pay it back. Be sure the bank will be reporting the account to the credit bureaus.
5. Number of recent inquiries (5 percent): Don't apply for credit unless you need it.
If you follow these tips, your credit score will improve over time.

Janelle D. Sterner
Mortgage Consultant
Prosperity Mortgage Company
(410)418-8120 Tel
(866)526-3897 Fax
(410)530-4665 Cell