Know your credit numbers before you look for that home you want to buy

Do you know how the credit agencies assess your credit worthiness--which is translated into your credit score?

Here's what I learned from a lender who looks at these things all the time:

The three credit bureaus divide your score into different elements, assigning a percentage of importance to each. For example,
Your payment history is 35% of your score and represents a total of 297.5 possible points
The length of your credit history is 15% of your score and represents a total of 127.5 possible points
New credit is 10% or a total of 85 possible points
The amount you owe is 30% for a total of 255 possible points
and the type of credit used is 10% for a total of 85 possible points.

I also learned that problems that might have affected your credit score, probably won't hurt you all that much after they are older than 24 months. And, here's another suggestion: if you have a credit card you haven't used in a while, do NOT cut it up. That card relates to your credit history. The longer that credit history, the better!

Finally, you are entitled to request one free report from each of the three credit bureaus once a year at no charge to you! It's a good idea to do that--if only to make sure that someone else's bad credit has not erroneously been attached to your name. Knowing your credit score can help you make a decision based on knowledge rather than guesswork or what you wish is the case.

Questions? Call your favorite lender for details.