Credit
scores range between 200 and 800, with scores above 620 considered
desirable for obtaining a mortgage. The following factors affect your
score:
1.
Your payment history.
Did you pay your credit card obligations on time? If they were late,
then how late? Bankruptcy filing, liens, and collection activity also
impact your history.
2.
How much you owe.
If
you
owe
a great deal of money on numerous accounts, it can indicate that you
are overextended. However, it’s a good thing if you have a good
proportion of balances to total credit limits.
3.
The length of your credit history.
In general, the longer you have had accounts opened, the better. The
average consumer's oldest obligation is 14 years old, indicating that
he or she has been managing credit for some time, according to Fair
Isaac Corp., and only one in 20 consumers have credit histories
shorter than 2 years.
4.
How much new credit you have.
New
credit, either installment payments or new credit cards, are
considered more risky, even if you pay them promptly.
5.
The types of credit you use.
Generally, it’s desirable to have more than one type of credit —
installment loans, credit cards, and a mortgage, for example.
For
more on evaluating and understanding your credit score.