A credit score is a number that is calculated based on your credit history. It gives lenders a simple way to figure out whether to grant you a loan or not. The system awards points based on information in the credit report, and the resulting score is compared to that of other consumers with similar profiles. With this information, lenders can predict how likely someone is to repay a loan. Lenders want to see people with established credit who have a history of paying their bills, paying them on time, and not spending more money than they have. 

          Your credit score is a number between 300 and 900. The score most commonly used by lenders is known as a FICO. In order to get the best and lowest interest rates on your home loan, you need to have the highest score possible. A score of less than 620 is generally regarded by most lenders as “risky”. An approximate breakdown of your score is as follows:

      1. 35% of your score is based on your payment history.

      2. 30% of your score depends on your outstanding debt. The more credit cards you have that are at their credit limits, the lower your score will be. Keep your card balances at 25% or less of their limits.

      3. 15% of the score depends on the length of time you have had credit.

      4. 10% of the score is based on the number of inquiries on your report, while another 10% is based on the types of credit you currently have.

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