What determines your credit score?, by Inwest Title a Utah Title Company

The economic climate in recent years, coupled with record high unemployment rates nationwide, has made it difficult for many Americans to meet their monthly obligations to creditors.  Increased mortgage defaults and historic foreclosure rates have taken their toll on many consumers’ credit scores as well.   Whether you have had recent credit struggles, or are just trying to build up enough credit to qualify for a mortgage to purchase or refinance a home, here are some helpful tips.

Your credit score is calculated on information obtained from your personal credit file.  This information is then analyzed in five different categories to produce your three-digit FICO® score.

Credit Score Breakdown


1.            Payment History: 35% of your score is based on paying your credit related accounts on time. Late payments or slow pays can drop your score quickly.

2.            Credit Utilization: 30% of your score is based on how much credit you have and how you are using it.  If you are close to utilizing the entire amount of your credit limit on a credit card or line of credit, it can reflect negatively on your credit score.

3.            Length of Credit History: 15% of your score is based on good payment history over a period of time.

4.            New Credit and Inquiries: 10% of your score is based on the number of recent inquiries and opened accounts coming from creditors. If you want to minimize the damage from credit inquiries, make sure that when you shop for a mortgage you do so in a fairly short period of time. The FICO® score treats multiple inquiries in a 45-day period as just one inquiry and ignores all inquiries made within 30 days prior to the day the score is computed.

5.            Types of Credit: 10% of your score is based on having a variety of credit accounts such as a home mortgage, auto loans, credit cards, etc.

Overall the best way you can improve your credit score is to:  Correct errors. Pay your bills on time. Pay down your debt. And apply for credit sparingly.

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6 Responses to “What determines your credit score?, by Inwest Title a Utah Title Company”

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  5. Wooden Chest says:

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