What Makes Up Your Credit Score
Credit scores are used by most lenders for mortgages, car loans, credit cards, furniture financing and more, to determine the level of risk they are taking when they loan you money. Credit scores can affect how much and what loan terms a lender will offer. Often the higher the risk, based on a low credit score, can mean a higher interest rate to the borrower while the higher scores are offered the lowest rates.
Credit Scores are calculated based on the following percentages
30% on the amounts you owe
35% is based on payment history
15% on the length of credit history
10% on the types of credit
10% on the amount of new credit
Unless you are paying cash, you should get preapproved prior to looking at properties. Sellers might be more likely to negotiate and accept offers accompanied by a PreApproval Letter.
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