Understanding Your Credit Score
Once you have a basic understanding of what credit score is needed for each type of loan, its time to take your own score into consideration. That means looking at your credit report.
Your credit report is an essential part of understanding your credit score, as it details your credit history. Any mistake on this report could lower your score, so you should get in the habit of checking your credit report at least once a year and report any errors to the credit reporting agency as soon as you find them. Youre entitled to a free credit report from all three major credit reporting agencies once a year.
If youd like to check your credit score, Rocket Homes, a sister company to Rocket Mortgage, can help. Rocket Homes helps you track and understand your credit profile. Rocket Homes allows you to view your TransUnion® credit report, which is conveniently updated every 7 days to ensure you get the most up-to-date information, as well as your VantageScore® 3.0 credit score.
Once you know your score, you can assess your options for a conventional or government-backed loan and, when youre ready, apply for a mortgage.
What Factors Affect Your Credit Scores
The two main credit scoring models, FICO and VantageScore, consider much the same factors but weight them somewhat differently. For both scoring models, the two things that matter most are:
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Paying bills on time. A misstep here can be costly, and a late payment that’s 30 days or more past the due date stays on your credit history for years.
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How much you owe. Credit utilization, or how much of your credit limits you are using, is weighted almost as heavily as paying on time. It’s good to use less than 30% of your credit limits lower is better. You can take several steps to lower your credit utilization. Scores respond fairly quickly to this factor.
Much less weight goes to these factors, but they’re still worth watching:
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The longer you’ve had credit, and the higher the average age of your accounts, the better for your score.
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Credit mix: Scores reward having more than one type of credit a traditional loan and a , for example.
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How recently you have applied for credit: When you apply for credit, a hard inquiry on your credit report may result in a temporary dip in your score.
Can I Rent An Apartment With A 629 Credit Score
Its simply a business decision. Most individuals or companies renting an apartment want credit scores from applicants to be 620 or higher. People with credit scores lower than 620 may indicate a high risk of default on rent owed. They indicate that you may not pay rent when its due or reliably every month.
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Why Your Credit Score Changed
Your credit score can change for many reasons, and it’s not uncommon for scores to move up or down throughout the month as new information gets added to your credit reports.
You may be able to point to a specific event that leads to a score change. For example, a late payment or new collection account will likely lower your credit score. Conversely, paying down a high credit card balance and lowering your utilization rate may increase your score.
But some actions might have an impact on your credit scores that you didn’t expect. Paying off a loan, for example, might lead to a drop in your scores, even though it’s a positive action in terms of responsible money management. This could be because it was the only open installment account you had on your credit report or the only loan with a low balance. After paying off the loan, you may be left without a mix of open installment and revolving accounts, or with only high-balance loans.
Perhaps you decide to stop using your credit cards after paying off the balances. Avoiding debt is a good idea, but lack of activity in your accounts could lead to a lower score. You may want to use a card for a small monthly subscription and then pay off the balance in full each month to maintain your account’s activity and build its on-time payment history.
How To Check Your Credit Score
Checking your credit score was once a difficult task. But today, there are many ways to check your credit scores, including a variety of free options.
Your bank, credit union, lender or credit card issuer may give you free access to one of your credit scores. Experian also lets you check your FICO® Score 8 based on your Experian credit report for free.
The type of credit score you get can depend on the source. Some services may offer you a version of your FICO® Score, while others offer VantageScore credit scores. In either case, the calculated score will also depend on which credit report the scoring model analyzes.
Some services even let you check multiple credit scores at once. For example, with an Experian CreditWorks Premium membership, you can get your FICO® Score 8 scores based on your Experian, Equifax and TransUnion credit reportsplus multiple other FICO® Scores based on your Experian credit report.
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How To Improve Your Credit Score:
Another common question when dealing with credit scores is What can I do to improve my score? There are many ways to improve your credit score to the higher end of the scale. Some of these methods include:
- Cleaning up your credit report
- Paying down your balance
- Negotiating outstanding balance
- Making payments on time
Credit.org offers consumers help in managing multiple payments. With a Debt Management Plan, you have the possibility of joining these payments into one lump sum with a lower interest rate. Learn more by reaching out to one of our today!
What Is A Good Middle Credit Score
Asked by: Tara Hoeger
The base FICO® Scores range from 300 to 850, and FICO defines the “good” range as 670 to 739. FICO®’s industry-specific credit scores have a different range250 to 900. However, the middle categories have the same groupings and a “good” industry-specific FICO® Score is still 670 to 739.
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How To Earn An Excellent/exceptional Credit Score:
Borrowers with credit scores in the excellent credit range likely haven’t missed a payment in the past seven years. Additionally, they will most likely have a credit utilization rate of less than 30%: meaning that their current ratio of credit balances to credit limits is roughly 1:3 or better. They also likely have a diverse mix of credit demonstrating that many different lenders are comfortable extending credit to them.
What Affects Your Credit Score
On the list of what affects your credit score, two factors have the biggest influence: Payment history, which is whether you pay on time, and credit utilization, which is how much of your credit limits you have in use.
Other factors matter but carry a little less weight: how long you’ve had credit, whether you have a mix of credit types and how frequently and recently you’ve applied for credit.
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How Good Should My Credit Scores Be
To buy a house?A 2019 Credit Karma report found that the average VantageScore 3.0 credit score that first-time homebuyers needed to buy a house in the U.S. was 684 which is at the lower end of the good credit range. But credit requirements vary depending on your state .
To rent an apartment?Prospective landlords may run a credit check before you can sign a lease, but theres no single credit score benchmark you need to hit to be able to rent an apartment. It can depend on the factors the landlord is looking for in a tenant, as well as where youre looking to rent.
To get approved for a credit card?Its possible to get approved for a credit card with poor credit or even no credit at all. Once you know what range your credit scores fall into, you can research cards that suit you and your goals.
If you have no credit, look for secured cards or cards for beginners . If you have limited or poor credit, secured cards or cards advertised for building or rebuilding credit could be a helpful leg up. Once youve improved your credit, you may be able to qualify for more-enticing offers, such as rewards cards or balance transfer cards.
Good credit scores can mean better terms, but its still worth comparison shopping.
Whats A Good Credit Score
So, what is a good credit score, anyway? Lets start at the beginning.
According to the Government of Canada, a credit score is a 3-digit number that represents how likely a credit bureau thinks you are to pay your bills on time.1 It can be an important part of building your financial confidence and security.1 For example, building a good credit score could help you get approved for loans and larger purchases, like a home.1 You may also be able to access more competitive interest rates.1
There are two main credit bureaus in Canada: Equifax and TransUnion.1 These are private companies that keep track of how you use your credit.1 They assess public records and information from lenders like banks, collection agencies and credit card issuers to determine your credit score.1
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Different Types Of Credit Scores
The three main credit bureaus are Equifax, Experian, and TransUnion. Each bureau gives you a score, and these three scores combine to create both your 629 FICO Credit Score and your VantageScore. Your score will differ slightly among each bureau for a variety of reasons, including their specific scoring models and how often they access your financial data. Keeping track of all five of these scores on a regular basis is the best way to ensure that your credit score is an accurate reflection of your financial situation.
Work With A Trusted Mortgage Loan Officer
Your mortgage lender is the ideal resource for asking questions about any part of the homebuying process before you are even ready to apply.
The professional loan officers at Homefinity can get you pre-approved so you can solidify your budget and take the proper next steps. or apply now to get started.
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Re: 629 Credit Score 100k Income
I signed up with Navy Federal a few months ago. Just to attempt that. I went into the office to open a $2k secured loan. I was told that they do not report secured loans against any of the 3 CRAs unless you default. I declined and switched to another credit union, but they have only been reporting to EQ. Obviously not ideal.
The sad part is, the lady was probably clueless and told me the wrong info about reporting. The worst part is that was the world headquarters branchwhich is here in my city. So if you indeed did this yourself at Navy Federal can you report what CRAs and how often they actually report?
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What Is The Highest Credit Score
The highest score is 850 for most credit score ranges. However, you don’t need to hold your breath to be close to 850 in order to have a good credit score.
Once you earn a very good credit score, you wont gain much from having an 850 FICO score instead of a 760. Its like how SPF 100 sunscreen doesnt work significantly better than SPF 50. A perfect score isnt necessary.
Still, its good to know how your credit score is calculated and how you can improve it. With FICO scores in particular, your credit score is influenced by five categories of information all of which can be found in your credit report.
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Youll Need To Explain Why
Your lender will likely grill you about the negative marks on your credit report.
This may seem intimidating, but its actually an opportunity to plead your case.
Frame your explanation in a way that shows that:
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Youve learned from your mistakes.
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You are working hard to fix them.
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They wont happen again.
You can also use this opportunity to highlight any positive aspects of your credit report.
What Is A Good Credit Score Range For Buying A Home
If your credit score range is between 740 and 850, you are likely to have the widest range of choices and the most attractive interest rates for your mortgage loan. Most lenders determine mortgage rates by credit score, making it less likely to achieve low interest rates if your FICO® scores are below 740.
You might still be offered a mortgage loan with lower scores, but the terms may not be as favorable. You could also be approved for a lower mortgage amount than the sum for which you originally applied.
The Federal Housing Administration may also be an alternative for first-time home buyers who meet certain criteria. If you are wondering how to buy a home with bad credit, an FHA loan may be the answer for you. Some of the primary requirements for an FHA mortgage include the following:
- You must provide a down payment of at least 3.5 percent of the homes value.
- You must be a legal resident of the U.S. with a valid Social Security number.
- Your debt-to-income ratio, including all outstanding loans and your new mortgage, must usually be 43 percent or less.
- You must have worked for the same employer for at least two years or have a generally stable employment history to qualify.
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Different Scores At Each Credit Bureau
Because each credit bureau could have different information on file about you, your credit scores will most likely differ for each of the three credit bureaus: Equifax, TransUnion and Experian.
Sometimes the difference is just a few points. Other times, the difference in your credit scores from each bureau can be vast due to an error or mistake in your credit report. These differences can cost you thousands over the life of a loan. Be sure to check your reports regularly or sign up for alerts to be notified when your score changes.
Whats A Good Credit Score Range
A good credit-score range depends on where a score comes from, who calculates the credit score and whoâs judging it. Itâs important to remember that lenders set their own and standards to determine . That means that what FICO, VantageScore or anyone else considers good may not be the same.
However, there are some general guidelines for how being within a score range can impact your choices:
- A poor to fair score means you may find it difficult to qualify for many credit cards or loans. You might need to start with a secured credit card or credit-builder loan to build or rebuild your credit. And if you do qualify for an account, you may have to pay high fees and interest rates if you don’t pay your balance in full each month.
- A fair to good score means you may be able to qualify for more options, but you wonât necessarily receive the best rates or terms. You also might find you can qualify for a traditional unsecured but have a harder time qualifying for a premium card.
- A very good or excellent score means you may be able to qualify for the best products with the lowest advertised rates. While creditors consider other factors too when determining your eligibility and rates, your credit score probably wonât be holding you back.
Whatâs a Good FICO Credit Score Range?
FICO scores that range between 670 and 739 qualify as good scores. Scores in that range are near or slightly above the U.S. average. In total, FICO breaks its scores into five categories:
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What Is A Bad Credit Score Range
Bad credit score = 300 549: It is generally accepted that credit scores below 550 are going to result in a rejection of credit every time. If your score has fallen into this range, improving your score is going to take some work.
Filing for bankruptcy can bring a score down to this level. Statistically, borrowers with scores this low are delinquent approximately 75% of the time. But if you continue to make your payments on time, your score should improve. There are certain types of loans, like home loans, that are hard to get with a score in this range, but there are still options for getting a mortgage with bad credit.
How Can I Check And Monitor My Credit
You can check your own credit it doesn’t hurt your score and know what the lender is likely to see.
You can get a free credit score from a personal finance website such as NerdWallet, which offers a TransUnion VantageScore 3.0.
It’s important to use the same score every time you check. Doing otherwise is like trying to monitor your weight on different scales or possibly switching between pounds and kilograms. So, pick a score and get a game plan to monitor your credit. Changes measured by one score will likely be reflected in the others.
Remember that, like weight, scores fluctuate. As long as you keep it in a healthy range, those variations wont have an impact on your financial well-being.
You can help protect your credit by freezing your credit. You can still use credit cards, but no one can apply for credit using your personal data because access is blocked when your credit is frozen.
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