Driving through the neighborhood one day you spot a beautiful townhouse for sale. But before you call for pricing information, do you know your credit score? The loan consultants at Premium Mortgage Corporation, want you to know just how important this rating is when it comes to determining how much house you can afford.
Also known as the FICO score, your credit score is a three-digit number ranging from 300 to 850 and is based on your debt payment history to determine creditworthiness for credit cards, mortgages and other loans. Here are the five factors that make up your credit score:
- On-time Payments: This means consistently making your debt payments on or before they’re due. It comprises 35% of your credit score.
- Total Debt: Using more than 50% of the credit available to you can potentially hurt your credit score. At 75%, your rating can significantly drop. With credit cards, lenders may consider you a “high risk" if you’ve charged to your limits. Your total debt makes up 30% of your credit score.
- Credit History: If you have a long record of payments, it will most likely work in your favor. Your credit history contributes 15% to your credit score.
- Applying For Credit: The number of times you apply for credit can affect your credit score. More attempts can determine the interest rate you receive. Talk to the loan officers at Premium Mortgage Corporation about the critical time between the mortgage loan approval and the closing when lending institutions may request your credit reports. Credit attempts make up 10% of your credit score.
- How You Handle Credit: If you have a variety of credit such as a mortgage loan, car loan, revolving credit or student loan and you’ve made on-time payments, your track record looks very favorable to lenders. How you handle credit contributes 10% to your credit score.
Your credit score carries essential weight when it comes to how high or low your interest rate will be on a mortgage loan. The home loan providers at Premium Mortgage Corporation specialize in helping you prepare for receiving the best financing terms.
To learn more about improving your credit score and receiving affordable loan rates, call Premium Mortgage Corporation at (585) 241-0000. If you’re ready to apply for a loan today, visit the website to get started on the application process. One of the company’s friendly mortgage loan officers will be sure to follow up.
Premium Mortgage Corporation can also be reached at the following:
2541 Monroe Avenue
Rochester NY 14618
Equal Housing Lender
Licensed Mortgage Banker NYSDFS