Understanding Your Credit Score

Understanding credit is crucial. Here’s what you need to know:

  1. What is Credit? Credit reflects your financial reliability when borrowing money. Lenders use it to assess your risk level.
  2. Factors That Matter:
    • Payment History: Paying bills on time is key.
    • Credit Utilization: Keep credit card balances low (below 30% of your limit).
    • Length of Credit History: Longer is better.
    • Types of Credit: A mix is ideal.
    • New Credit: Limit new accounts, especially before a mortgage application.
  3. Focus Areas:
    • Payment History: Always pay bills on time.
    • Credit Utilization: Keep balances low.
    • Credit Inquiries: Limit them.
    • Credit Mix: Aim for variety.
  4. Improving Your Credit:
    • Check Your Report: Look for errors.
    • Pay Bills Promptly: Set reminders.
    • Reduce Credit Card Balances: Lower utilization.
    • Avoid New Accounts: Unless necessary.
    • Be Patient: Building good credit takes time.
  5. Seek Advice: Consult a CityWorth mortgage banker for personalized guidance.

Understanding credit is essential for securing your first home. Focus on key factors, improve where needed, and seek professional advice from a CityWorth mortgage banker

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