704 Credit Score – How much my credit dropped after buying a house | Credit for beginners
704 Credit Score – How to Choose
In this video, I reveal exactly how much my credit score dropped after buying a house. I go over an in depth analysis of credit for beginners. Let’s call it credit 101, which is mainly for beginners. I explain the benefits of credit and exactly how credit works. Later I explain how the purchase of a house would affect your credit score.
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As most people know, credit is pretty much a score that tells lenders how responsible you are with money. The higher the score, the better. Simple as that. Having great credit comes with a lot of benefits. You will get the lowest interest rates on purchases and credit cards and you will be required to put the minimum amount of money down. There are 5 factors that have an impact on your credit score.
Your payment history has the biggest impact on your score, at 35%. This one is pretty simple, always pay your bill on time. The End.
Your credit card utilization has the second biggest impact at 30%. This only deals with your credit cards. The more available credit you have and the less credit you use, the better. It’s best to try to keep your utilization as low as possible.
The age of your credit history has the third biggest impact at 15%. Obviously, if you are just starting out, the average age of your credit history will be low. You can help yourself out buy building your credit as soon as you can. It generally increases over time.
Hard Inquiries account for 10% of your credit score. Every time you apply for a loan or credit card, you get dinged. They stay on your report for 2 years but only impact your score for 12 months. When you’re shopping for an auto loan or mortgage, you will be allowed to apply with as many lenders as you can within a 30 to 45 day window without it affecting your score.
Your credit mix/ total accounts is 10% of your credit. The more types of accounts and total number of accounts you have, the better. Credit companies like to see a mix of revolving debt and installment debt.
Last but not least, I reveal how me purchasing a house impacted my credit. Please remember to like, subscribe and share. Follow me on instagram @timleak_realestate. As always, I hope to see you guys in the comment section.