Understanding Credit Scores
Credit scores rely on a scoring system that is used by each credit of the reporting agencies, and they each use a bit different systems and a bit different scales. But if you have a good credit score from one of the three big credit agencies — Equifax®, Experian® or TransUnion® — they are likely to have a good score with all of them.
The specific algorithms the credit reporting agencies use to create those scores are a closely guarded secret, but there are five factors that they weigh when it comes to determining an individual's credit:
Length of credit history
Types of credit
Total amount of debt
Even though all of these factors are significant, the amount that they affect your credit score vary. "Types of credit" can make up 10% of your total score, while payment history makes up maybe 35% — a good reason to make sure all of your bills are paid on time.
Another interesting fact I have been told by several lenders is that the credit score that you pull for yourself can be very different then the one your lender will get if they pull one for you.
If you'd like any more info about credit scores or want to talk to a lender about buying a home, I can help point you in the right direction.
Michael was born and raised in Brooklyn NY. He graduated from Brooklyn College with a degree in Mathematics. His first job out of college was as an engineer tracking satellites. His last career before....