Your Lake of the Ozarks Mortgage Lender: how credit score is determined

Friday, July 31, 2020

Tips for Building Your Credit Score

Your credit score will play a large role in getting your home loan, which means that paying attention to it and working to build it can be valuable. Your credit score will be used to determine your financial trustworthiness, and even if you aren’t thinking about buying a house right now, it can take time and planning to build it. Team Lasson has a few tips to help you make sure that you are working for the benefit of your credit score!

Watch Your Card Balances

One of the biggest things that you will want to watch is that you keep your credit card balances low. One of the major factors in determining your credit score is how much of that available credit you’re actually using. A good rule of thumb is the smaller the percentage the better, and an ideal percentage would be around 30% or lower. Another tip is to see if your credit card issuer will accept multiple payments throughout the month in order to get that statement balance down.

Consolidate Credit Card Debt

If you have multiple cards with small balances on each one, a good way that you can aim to improve your credit score is to get rid of those balances completely. An interesting factor that plays a role in determining your credit score is simply how many cards you have with balances.

Keep Your Credit Looking Strong

Two issues that can sink your credit or cause you to look risky are missing payments or suddenly paying less or charging more than you normally do. These actions can indicate risk in your accounts and could make it more challenging for your loan to go through. Essentially, you want every purchase to show that you are not going to be a risky investment and that you will pay the money back with timely payments.

Keep Accounts Open and Don’t Open New Ones

Did you know that closing unused credit cards will not raise your score? In fact, in most cases, it can cause your utilization rate to dramatically increase. On the other hand, you don’t want to open many new accounts while you are in the process of raising your credit score as this could reduce your utilization rate and backfire on you. Just keep a slow and steady pace and know that every step you take in the right direction will help get you there.

Pay Bills On Time

When planning to purchase a home at Lake of the Ozarks, you may be saving up money, but don’t let that savings spree delay your monthly expenses. It’s important to continue to pay your bills on time, as paying them after the due date can affect your credit score. Remember that even if you have a large sum of money in savings, a drop in your credit score due to not paying your bills on time could cause issues with your home purchase.

In general, building your credit score is about fixing errors in your credit history and then maintaining a consistent, good credit history from there on out. Raising your credit score will take patience and discipline, but it will all be worth it when you get to buy a dream home at Lake of the Ozarks. If you're thinking about applying for a home loan at Lake of the Ozarks anytime soon, contact me at 573-746-7211. As your Lake of the Ozarks mortgage lender, I'll work with you every step of the way!

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Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

Thursday, July 4, 2013

How is your Credit Score Determined?

When it comes to getting a Lake of the Ozarks home loan, one of the biggest determining factors is your Credit Score. There is a lot of confusion about what a credit score is and how it is determined. Here are a few things that are considered when your credit score is determined.

Your credit score is usually based on the answers to these questions:

Do you pay your bills on time? The answer to this question is very important. If you have paid bills late, have had an account referred to a collection agency, or have ever declared bankruptcy, this history will negatively impact your score.
What is your outstanding debt? Many scoring models compare the amount of debt you have and your credit limits. If the amount you owe is close to your credit limit, it is likely to have a negative effect on your score.
How long is your credit history? A short credit history may have a negative effect on your score, but a short history can be offset by other factors, such as timely payments and low balances.
Have you applied for new credit recently? If you have applied for too many new accounts recently, that may negatively affect your score. However, if you request a copy of your own credit report, or if creditors are monitoring your account or looking at credit reports to make prescreened credit offers, these inquiries about your credit history are not counted as applications for credit.
How many and what types of credit accounts do you have? Many credit-scoring models consider the number and type of credit accounts you have. A mix of installment loans and credit cards may improve your score. However, too many finance company accounts or credit cards might hurt your score.

**Information taken from http://www.federalreserve.gov/consumerinfo/fivetips_creditscore.htm

We would love the opportunity to work with you to help determine your credit score and give you some ideas on how to improve your score. Give me a call at (573) 746-7211 or send me an email at mlasson@fsbfinancial.com.