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Understanding Your Credit Score.

When you’re applying for a mortgage, your credit score is a major factor in whether your application will be approved and in deciding your interest rate. A higher score increases your chances of approval and a receiving a lower interest rate, but how is your score determined?


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Most companies use a FICO credit score comprised of five elements.


Your Payment History – 35%

Late payments affect your score negatively. Be sure to pay all of your credit accounts on time.

How Much You Owe – 30%

Your FICO score is influenced by how much you owe on all of your accounts, the number of accounts with balances, and how much of your available credit you are currently using. The more you owe in comparison to your credit limit, the lower your score will be.

Length of Credit History – 15%

While a short credit history may not necessarily impact your score if the rest of your credit report shows responsible credit management, a longer history may increase your score.

New Credit – 10%

Be cautious of credit inquiries. Any time there is an inquiry into your credit, it affects your score negatively. Mortgage inquiries are the only exception; while shopping for a mortgage loan, you may have as many inquiries as you like within 30 days, and they will count as one.

Other Factors – 10%

A number of other smaller factors can influence your score. For example, having a variety of credit types on your report, such as credit cards, mortgage loans, auto loans or personal lines of credit, can indicate a long credit history and lead to a slightly higher score.

What’s a good score?

FICO scores range from 300 to 850, with higher numbers being better. A score of 700 is a good indicator of financial health, and most lenders prefer scores at or above that number.


Author: David Bryce

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David Bryce is a Senior Loan Officer at Priority Home Lending LLC in Greater Seattle Area. For your Loan related questions, contact David at,

For your Real Estate related questions, contact Shital Doshi Shah.

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Shital Doshi Shah is a Residential, Commercial and Relocation Realtor in the Greater Seattle area. She works hard to provide her clients with the most positive real estate experience possible. A vital part of today’s real estate industry is technology, and to that end she provides her clients with state-of-the art marketing and web tools. It’s just one of the many things that has made her one of the most respected real estate agents in the communities and neighborhoods she services.


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