Mortgage Companies pull credit from the 3 main credit bureaus. (Equifax, Experian, and TransUnion) A FICO score is assigned for each bureau. These scores are used as a way to gauge the borrower's ability to repay. Examples of scores are:

• 721-820 = Superior credit
• 700-720 = Excellent credit
• 680-699 = Average credit
• 640-679 = may have extra "conditions", and fee or rate adjustments
• 500-639 = poor credit, subprime financing only

• Good credit, paid as agreed, remains on the credit report for 10 years.
• Accounts not paid as agreed remain for 7 years.
• Collections remain for 7 years.
• Unpaid tax liens remain indefinitely, paid tax liens remain for 7 years.
• Courthouse records remain for 7 years from the date filed except bankruptcy Ch. 7, 11, 13 remain for 10 years from the date filed.

1. Payment history has a 35% impact. Paid on time as agreed is positive.
2. Outstanding credit balances have a 30% impact. Try to keep balances below 50% and better yet 30% of available credit.
3. Credit history has a 15% impact. A seasoned borrower is stronger.
4. Varieties of credit have 10% impact. Having a high concentration of credit card debt only, is not as desirable as a mix of mortgages, auto loans, and credit cards.
5. Inquiries have a 10% impact. Hard inquires negatively impact scores. Auto and mortgage inquires receive special treatment, allowing 20 inquires in a 14 day period to be treated as one. Each hard inquiry can cost 2-50 FICO points.

1. Look for past due balances and bring them current.
2. Evenly distribute debt among open credit cards to keep all cards below 50%.
3. Do NOT close existing accounts.
4. If married keep separate credit cards to provide flexibility in transferring some of the balances to one spouse to increase the score of the other.
5. Request an increase in available lines of credit cards to reduce the debt to available credit ration. (Only if it can be done without a hard inquiry)
6. Pay off charge offs within the last two years.
7. Request that creditors and credit bureaus delete any outstanding debt that is incorrectly charged to you, or has not yet been cleared.