How to get a great credit score!

We all want a great rate on our Mortgage.  To do that we need a great credit score.  It is more important now than ever!

1) Don't pay late!  30 days late on anything can really lower your credit score.  Approximately 35% of your credit score is based on your payment history.   If you pay on time every time you will have a much better score.  Even one late payment can lower your score up to 100 points.  

What if I already have late payments?  Stop paying late now.  The longer it has been since your last late payment the better off your score will be!  We can't do anything about the past but we can do something about the future. 

2) Keep your balances on credit cards below 30% of your credit limit.    Below 25% is even better.   About 30% of your credit score is based on your balances.  Creditors feel comfortable if you have 75% of your max credit still available.   Every percentage point above 30% will decrease your credit score about 1 point.  

For the same reason - if you pay off a credit card - don't cancel it!  If you do it lowers your total available credit and this will lower your score. 

3) If you are about to apply for a Mortgage - don't apply for any new credit lines.   New credit is seen as a negative.   If you are in the process of getting a mortgage - absolutely do not apply for anything new.  They will check your credit a couple of days before you close escrow to re-verify.  

If you will follow these simple guidelines - you will have a great credit score and be able to get a great mortgage rate. 

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