Real Estate and Property Management Blog

Six Factors that affect your Credit Score

Robert Hacker - Tuesday, December 22, 2015

Your Credit Score is an important part of financing. From getting a credit card to a car loan to the biggest debt most Americans incur - a mortgage.

Even in renting a home or apartment your credit rating will have an effect on getting approved as a tenant or not. Ocean West Realty manages a lot of rentals and we see credit ratings of all kinds from prospective tenant applicants.

There is a little saying around the office that is mostly true about an applicant credit rating and that's if the credit score is 700+ then it's almost an automatic approval. While there are certainly other factors to consider a good credit score goes a long way.

Here is a quick and to the point list of what effects your credit rating:

  1. Debt ratio. You do not want to ever max out your credit cards. Even if you pay on time each month the maxed out credit will have negative effects on your rating. You want to keep your total credit card debt below 20 percent and below 10 when possible. If you have a credit card with a 1000 limit try not to charge more than 200 any given billing period. Ask for a credit limit increase if you often charge more. Conversely to that, do not through your card into a draw and not use it. Credit agencies want to see you are responsible with the credit allowance and have the ability to pay it off each month.
  2. Pay On-Time! This should be a no brainer but always be sure to pay on time. Don't wait until the last minute to pay your bill. It's okay to pay it a little early and with online banking technology you should be able to set up an auto payment or bill pay so you can avoid being late. DON'T PAY LATE!
  3. Credit Age. This is pretty straight forward. The longer you have credit the better it is for your rating. As soon as you turn 18 get a credit card. If it's a department store, student or even a pre-paid credit card open one ASAP.
  4. Trade-Lines. Over time, your trade-lines will add up. Generally the more the better. A trade-line is any account that offers you credit that appears on your credit report. Paying off a car will show as a trade-line and the more times you have been loaned money and paid it off the better your credit score will be.
  5. Inquiries. Credit inquires do effect your credit score but usually only the hard credit inquiries. The difference between a hard and soft is if you applied for or requested credit. If you apply for a home loan or car loan the lender will pull your credit. That's a hard inquiry. If you receive a letter from your credit card company offering you better interest rate and a higher limit they most likely pulled a soft credit inquiry. They have the ability to check your credit (read the fine print) but generally that doesn't affect your score. If you want a car, show around, find the car you want, then apply for it. Do not bounce around to auto dealers submitting credit applications because it will negatively impact your score.
  6. Derogatory. Bankruptcy, foreclosure, repossession, charge offs and collections. We all know they are bad. Try not to get over extended or your credit will take a big hit.

There is an option that credit card companies provide called authorized user. Experian has a FAQ post regarding authorized users but essentially a parent can add their just turned 18 year old to one of their credit cards as an authorized user. This can help build a trade-line and establish credit age.   You can see more info here:   http://www.experian.com/blogs/ask-experian/tag/authorized-user/

Your Credit Rating can also save you a lot of money. The better the score the better offers you receive on financed money. A high credit score can provide lower interest rates which cost you less on your payments. Being credit responsible has it's perks.

A good tip for a good credit rating is not to ignore it. May times we experience it where someone has a collection causing a negative trade-line to effect their score but the amount past due is roughly $20. That's an easy thing to clear up. So, even if your current score is low you can work today towards improving your score for tomorrow.


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Ocean West Realty
31885 Mission Trail
Lake Elsinore, CA 92530

Business: 949-367-1940
Direct: 951-267-0165
Fax: 951-226-0171

CalBRE# 01524391

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