Five Factors That Determine Your Credit Score

Credit scores range between 200 and 800. Scores above 620 are considered desirable for obtaining a mortgage. The higher your credit score, the better terms you can negotiate on your mortgage (ie. the more money you can save).

These factors affect your score.

1. Your payment history. Whether you paid credit obligations on time.
2. How much you owe. Owing a great deal of money on several accounts can indicate that you are overextended.
3. The length of your credit history. The longer the better.
4. How much new credit you have. New credit is considered more risky, even if you pay promptly.
5. The types of credit you use. It's usually more desirable to have more than one type of credit - installment loans, credit cards, mortgage, etc.

For more on evaluating and understanding your credit score, go to http://www.myfico.com/

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