Ever wonder how your credit/beacon score is determined? Here's the breakdown: (Note - this is for Equifax. May be different for TransUnion)
- 35% repayment history
- 30% utilization. (ie. all trades are maxed vs. 50% utilization)
- 15% history (ie. collections in past, bankruptcies, etc.)
- 10% credit mix - Vehicle loan vs. credit card: A vehicle is considered a necessity, therefore not as indicative of credit. If you don't pay your vehicle payment, you're walking.
-10% new credit - ie. amount of inquiries.
Common misconception: Having bureau pulled multiple times. This is the "de-duping" rule. If the credit pulls are considered similar in nature (ie. all for mortgage purposes), your credit score will not take an extra hit for each pull, provided they are done within a certain time-frame. (15-45 days depending on type). *Note that as a broker, I only have to pull clients' credit once, no matter how many lenders the deal is 'shopped' to, as long as the credit bureau is < 60 days old*
Feel free to ask any questions about credit in here or via PM, or for tips on improving scores.
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