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Part 1: Factors Affecting Your Credit Score

This begins credit month at United Northern Mortgage Bankers, Limited.  Our five part weekly series, How Credit Affects Your Home Loan Rate.  

In today’s connected world our credit score is transparent for us to see from a number of sources. So you can have a pretty good idea of what your score is, but improving it become a frustrating project that can take up an unreasonable amount of time! Or maybe you know what your score is, as well as the basics of improving it, but perhaps don’t fully understand how the score is actually currently calculated.

Your credit report and credit score play a large role in the loan programs for which you qualify and the corresponding interest rate you receive.  This guide will educate you on a well-known, yet mysterious topic and provide you with tools as well as solutions to move forward now or chart your course for a future home purchase.


The Factors

lower credit score can potentially cost you tens of thousands of dollars over the term of your loan.  Your credit report is a track record of your payment history.  It is a cumulative number that measures your success relative to others.  What is a FICO score? It’s a three-digit number that lenders and credit card issuers use to predict how likely you are to repay them. The score is also used to assist in setting the interest rate you’ll pay.  The Fair Isaac Corp. introduced FICO scores more than 25 years ago, and they are the most widely known credit score.

FICO uses a proprietary formula to gauge your creditworthiness. The formula is applied to data in your credit reports at credit reporting agencies Equifax, Experian and TransUnion. The credit bureaus have slightly different data from one another, so your score may vary for each bureau. FICO scores range from 300 to 850. On the FICO scale, the higher the number, the better your score since there is less perceived risk to your lender.

The credit tiers generally look like this:


Credit Rating Credit Score
Excellent 750+
Good 700-749
Fair 650-699
Poor 600-649
Bad Below 600



FICO doesn’t reveal exactly how scores are calculated.  However, they do provide guidelines about what factors:

  • Payment history (35% of your score)

This concerns whether you’ve paid on time. Late payments can ding your score. Thirty days late isn’t as bad as 60 and so on.  Bankruptcy or accounts in collections will also hurt your score.

  • Amount of debt relative to credit limits (30%)

This is how much of your available credit you are using — the less, the better for your score.

  • Age of credit (15%)

This refers to how long you’ve had credit and the average age of your credit accounts. Longstanding and stable credit adds value to your score.

  • Recent applications for credit (10%)

A “hard inquiry”  that is documented by the credit bureaus when you apply for new credit can ding your score for up to six months.

  • Whether you have more than one type of credit (10%)

Having both installment loans (those with level payments, like a car loan or mortgage) and revolving credit (accounts with a credit limit but allows you to determine how much you will charge, like a credit card) can help your score.



Paying on time and keeping balances low account for approximately two-thirds of your score.

United Northern Mortgage Bankers, Limited has been trusted for over 39 years to help our customers with their home financing needs. We are happy, at your request, to run your credit report and provide you with credit analysis free of charge.  This and other benefits are available as part of credit month at United Northern Mortgage Bankers, Limited. 


United Northern Mortgage Bankers Limited, DBAs: Senior Security Home Advantage, Senior Security Advisors, 3601 Hempstead Turnpike, Suite 300, Levittown, NY 11756 Corporate – NYS Dept. of Financial Services Licensed Mortgage Banker NMLS # 7230 · AL Consumer Credit license #21761 · CO Mortgage Company Registration · CA Finance Lenders Law license # 603K800 ·Licensed by the Department of Business Oversight Under the California Residential Mortgage Lending Act. #4131321 · CT Dept. of Banking Mortgage Lender license #20372 · DC Mortgage Lending License #MLB7230 · FL Dept. of Financial Institutions Mortgage Lender license #MLD273 · GA Dept. of Banking and Finance Mortgage Lenders license #39919 · IL Residential Mortgage Lender license# MB6761307 · Indiana-DFI Mortgage Lending License · MD Mortgage Lender license · MA Div. of Banks and Loan Agencies Mortgage Lender & Mortgage Broker license #MC7230 · NJ Dept. of Banking and Insurance Mortgage Lender license #9938995 · NC Commissioner of Banks Mortgage Lender license #L140365 · PA Dept. of Banking Mortgage Lender license #20887 · Rhode Island Lender License #20183612LL · SC State Board of Financial Institutions OTN Mortgage Lender license #MLS7230 · TN Mortgage license #115610 · TX – SML Mortgage Banker Registration · VA Lender license #MC5787 · WA Consumer Loan Company license #CL-7230 · Direct Endorsed FHA Lender. United Northern Mortgage Bankers Limited is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.  United Northern Mortgage Bankers, Ltd. is an Equal Housing Lender. All programs are subject to approval by United Northern Mortgage Bankers Limited.  All Rights Reserved.