Credit scores range between 200 and 800. Scores above 620 are considered desirable for obtaining a mortgage. The following factors affect your score.
1. Payment history; Did you pay credit cards on time? If paid late, how late? Bankruptcy filing, liens, collections?
2. How much you owe; If you owe a great deal on numerous cards, it can indicate you are overextended. Small amounts spread over numerous cards is a positive point.
3. Length of credit history; The longer the accounts are open generally is a good point.
4. How much new credit you have; New credit is considered more risky.
5. Types of credit you use; Generally, it’s more desirable to have more than one type of credit- credit card, installment loan, mortgage.
These are the 5 factors that decide your credit score.