• 35% Payment History
• 30% Amount Owed
• 15% Credit Length
• 10% New Credit
• 10% Credit Types

Q: What is a "good" score?
A: Credit scores range from 300-850 and you get a score from each of the three credit bureaus. Most often the middle of the three scores is used in qualifying for a home loan. A score of 660 or more is considered "good" and 700+ is "excellent".

Q: How often do scores change?
A: They can change daily. The important thing to remember is that your score is a snapshot of your credit at the moment it is accessed. Because your credit file is constantly changing, so is your credit score.

Q: What factors are considered in a score?
A: Payment history, amounts owed, length of credit history, new credit and types of credit are all factors in a score (see side chart for how these factors are weighted). Items such as race, color, religion, age, salary, employment history, where you live or rates on your credit cards are not factors.

Q: How do inquiries affect score?
A: Anytime anyone checks your credit report it creates an "inquiry" which can lower your score. The amount that an inquiry affects a score is relative to the composition of your overall credit. If you have a "thin" file or one with very little credit, an inquiry will have a greater impact than it will on one with a larger credit history. Auto and mortgage related inquiries that occur 30-days prior to scoring have no affect on score. Outside this 30-day period, auto and mortgage related inquiries that occur within any 14-day period are treated as a single inquiry.

Q: Are there any "quick fixes" for raising a score?
A: Yes! Credit re-scoring is the process by which (with proper documentation) a tradeline is updated, and a new report and score is obtained. This process can take as little as two to three days. Credit re-scoring is expensive and should only be done with a lender that has experience in that area. If done improperly it can actually lower your score.

If you are considering buying or refinancing a home in the next 5 months, it's a perfect time to call and check on your credit report. If you wait, you may have to re-score at the last minute or worse, be stuck with a higher rate loan as the only option. You can always request a free copy of your credit report. Congress has passed the Fair and Accurate Credit Transactions Act, part of which mandates that consumers have a central place to obtain a free copy of their report from each bureau once every 12 months. For the Midwest this will be available on March 1, 2005. Call Optimus Home Mortgage at 612.872.1686 for more information on the three ways to get your free reports or follow the link here.