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Why is my credit score low?

3 reasons credit score stinks

3 Reasons Credit Score Stinks

Have you recently run your credit and found that your score is much lower than expected?

Well, here are 3 reasons credit score stinks.

Foreclosure / Short Sale / BK

If you’ve had any of the these recently, it can dramatically impact your credit score in a negative way.

Mortgages are typically the largest loan amount that someone has in their lifetime.

When a person defaults on their mortgage it can disqualify them from getting another mortgage for up to seven years.

Bankruptcies can also have a large negative impact on your credit scores.

Bankruptcies can prevent the applicants from getting a new home loan for several years.

Those who declare Ch.7 Bankruptcy will wait at least two years from the discharge date to apply for a new home loan.

Collections/Judgements

Collections will most likely lower your credit score when the collections are not being disputed.

However, collections are not typically included in the credit score when they are disputed.

If you plan on applying for a home loan, keep in mind that banks will typically want you to un-dispute any collections that appear on your credit report before funding a loan.

Credit Balances > 30% of Line Amount

Having some credit debt can be good for your credit scores. However, having too much credit debt in relation to your line amount can cause the credit scores to drop.

The three credit bureaus (Equifax, TransUnion, Experian) will typically adjust your credit score lower whenever there is a credit line that has balance of over 30% of the line amount.

With this in mind, if you’re going to apply for a home loan don’t completely pay off your credit lines to a zero balance.

But rather, pay these credit balances down to under 30% of the line amount and you’ll have a better chance of getting a high credit score.

For more in-depth tips on how to improve your credit score, visit www.accloans.com.

Feel free to check out some of our other posts covering everything from appraisals to tax deductions here: www.lionsgatereg.com/blog