Ever wonder what really impacts your credit score? Think of it like a bathtub.
✅ Every on-time payment? That’s like turning on the hot water—the tub starts to fill, and your score warms up.
🚫 Miss a payment? Now you’ve turned on the cold—the water cools, and your score drops.
💥 Bankruptcy? That’s like pulling the plug and ripping the faucets off—the tub empties completely.
The good news? With consistent, responsible credit use, you can always turn the hot water back on.
What Makes Up Your Credit Score?
Your credit score (commonly a FICO score) is built from different pieces of your credit history. Here's how it breaks down:
🔹 35% – Payment History
Your history of making timely payments is the most important factor. Paying credit cards, loans, and other debts on time builds trust with lenders—and helps your score rise.
🔹 30% – Amounts Owed
This reflects your credit utilization. Say you have a credit card with a $1,000 limit and you owe $900—your utilization is 90%, which can drop your score fast. Ideally, you want to keep your balance below 30% of your limit.
🔹 15% – Length of Credit History
The longer your accounts stay open and in good standing, the better. While it might be tempting to close old accounts for a shiny new card, keeping older accounts open helps establish a strong history.
🔹 10% – Credit Mix
Lenders like to see that you can manage different types of credit—credit cards, auto loans, mortgages, student loans. A healthy mix shows versatility, but it’s not necessary to chase new types just for the sake of it.
🔹 10% – New Credit
Opening new accounts can temporarily lower your score, but responsibly using new credit can still help in the long run.
Here's the Best Part
Your credit score isn’t set in stone. If you've made mistakes in the past, you can always rebuild. Start with these simple steps:
✔️ Avoid opening or closing too many accounts at once.
✔️ Keep credit card balances under 30% of your limit.
✔️ Stay consistent with on-time payments.
We’ve worked with buyers at every stage of the credit journey—some didn’t even realize their score was mortgage-ready! Others just needed a small plan to boost their score over time.
Thinking of buying a home but unsure about your credit?
Let’s talk. We’ll help you understand where you stand—and how to move forward. There’s no cost to apply, and no pressure. The only mistake is not knowing.
