Monday, November 23, 2009

Credit Information EVERYONE Needs to Know

If you are thinking about buying a or re-financing now, or anytime in the future, one of the main factors determining your ability to qualify for a loan is your credit score. Understanding what credit scores mean, how they are calculated, and how to improve your score can make the difference in your ability to qualify for a loan and get the best possible terms and interest rates.

Credit scores range from 300-850. Here is how those scores are broken down:

780 and Above: Outstanding
740-780: Excellent
690-740: Good
620-690: Fair
62o and Below: Poor

Typically, the higher your credit score, the better loan terms you will be offered. People with scores below 620 will generally not be able to qualify for a loan.

Credit scores are determined by a number of factors including:

  • Amounts owed
  • Payment history
  • Types of credit in use
  • New Credit
  • Length of Credit History

There are three major credit reporting agencies: Equifax, Experian, and TransUnion. These agencies may all have slightly different information, and they each use a different method to calculate credit scores, so your score will be slightly different from each one. Most lenders will pull credit reports from all three agencies when processing a loan. It is important that everyone checks their credit report at least once a year to ensure that the information is accurate and up-to-date. You can pull a free copy of your credit report once a year through the website This website also offers credit scores, for a fee.

If your credit score has seen better days, there are things you can start doing right away to improve your score:

  • Pay all your bills on time
  • Work to get credit card balances below 25% of their limits
  • Open new accounts only if absolutely necessary
  • Lengthen your credit history
  • Seek credit counseling through the National Foundation for Credit Counseling
  • Opt-out to stop receiving new credit card offers through or call 1-888-567-8688
In Boulder County, we have a fantastic resource for anyone who is thinking about buying a home and has questions about credit or related items. The Boulder County Housing Counseling Program offers free housing counseling and classes These services are available to residents of Boulder, Broomfield, and western Weld Counties.

Brought to you by:

Jennifer Fly
Broker Associate
Colorado Landmark, Realtors
(303) 443-3377
Twitter: jenflycolorado

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