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2019 Idaho Real Estate Blog

Credit Scoring -- Length of History is IMPORTANT! Main Boise Home Loans
This next portion of your credit score I will discuss accounts for 15% of your credit history. Read on!

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Dear BuildIdaho.com reader:

This area of your credit profile carries high significance to potential creditors and lenders, because it traces your credit history all the way back to the oldest account listed. But...it isn't as simple as it seems.

This portion of your credit score is calculated by taking your oldest credit record on file, and then calculating an average age of your credit accounts. It considers three different factors:

1) How long your accounts have been open.

2) How long you have used certain types of accounts.

3) How long it has been since you last used your accounts.

In order to maximize the 15% of your credit score that is derived from this factor, consider these tips:

Make Sure Your Accounts ARE Reporting

Many of my clients are surprised to see when I pull their credit for a mortgage application that a credit account they use is not reporting. If the account is not reporting, then you're not getting points for it! If this is happening, write or call your creditor and ask that they immediately begin reporting to all three credit bureaus.

Don't Close Old Accounts

Even if you don't use the account, do not close it. I've seen lots of credit reports with old Les Schwab or Sears accounts that haven't been used in years. It is much better to have that history as opposed to cutting it off. However, in cases of divorce or identity theft, by all means...close the accounts.

Be Careful About WHEN You Add New Accounts

Don't add new acocunts when you are ready to apply for a mortgage. Those points you lose can lower your credit score, and add to your interest rate!

Don't Open Lots Of New Accounts At Once

You can kill your average age of accounts by opening too many new accounts at the same time, and therefore lowering your score.

If you are interested in talking more about this post or a specific credit scoring issue you have or know about, feel free to call me at (208) 880-0316, or email me at eric@ericsloans.com. You can also visit my website at http://www.ericsloans.com.

Regards,

 


Eric Leigh, Mortgage Consultant
2965 E. Tarpon Drive, Ste. 150
Meridian, ID 83642
(208) 880-0316
http://www.ericsloans.com
eric@ericsloans.com

 

 
Posted by Eric Leigh at 7/2/2009 1:44:00 PM
Comments (3)
Re:Credit Scoring -- Length of History is IMPORTANT!
Great information Eric. What is the most common ding most people gt that is easily avoidable?
Posted by on 7/2/2009 10:24 AM
Re:Credit Scoring -- Length of History is IMPORTANT!
Trey,

Good question. Paying bills on time is by far the easiest "ding" that can be avoided. It's also the most obvious. Another not as obvious thing that people can do very easily to gain points and avoid "dings" is to always keep your credit card balances below 30% of your available credit limit (see past BLOG entries). You can do this by always paying your credit card just a few days before the statement cycles for the month!

Call or email me with other questions!

Eric
Posted by Eric Leigh on 7/2/2009 6:11 PM
Re:Credit Scoring -- Length of History is IMPORTANT!
Thanks...! This is good information
Posted by on 7/3/2009 11:00 AM
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Michelle Penick, Build Idaho Client Real Estate Services

Michelle Penick

Client Care Team
208.629.0217 | Info@BuildIdaho.com

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