Factors That Affect Your Credit Score

Credit scores typically fall between 500 and 850. If your applying for a car loan or a home mortgage then you should be above 620 and above 720 to get the better rates. The following factors will affect your score and therefore affect your interest rate and the terms for your loan.

1. Your credit history. Your payment history will be recorded as to whether you made your payments on time versus being 30 days late and how many times your were late.

2. You don't want to be lending institutions to view you as being overextended. Keep your expenses in check. If you owe alot of money on several different accounts it's not going to look good on your application.

3. The longer your payment history is established the better.

4. Older credit card history is better than new cards. A long record of paying on time with an older credit card is more favorable than having a new card that has no history attached.

5. A mixture of mortgage, credit cards, installment loans is favorable to having all credit cards.

For more on evaluating and understanding your credit score, go to http://www.myfico.com.

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