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Offered by Jan Giuliano, – Universal Lending, The Giuliano Team

Your credit score shows the likelihood to repay credit that is extended to you. Scores range from 350-850. When you pull credit, you get a score that shows your handling of credit at that moment in time, but it can change with new actions and passage of time. Your score determines how much money it will cost you to borrow money from a lender. The higher the score the less the loan will cost you. There are five categories and approximate percentages that determine your score.

Payment History (35%) is the largest factor used in determining scores. The number of unpaid bills you have, any bills sent to collection, bankruptcies etc affect your score. The more recent the problem, the lower your score will be.

Outstanding Debt (30%) is next. Are you maxed out on your credit card? Available credit is important; keep your balances at no more than 30% of credit limit.

Length of credit history (15%) is important. Don’t close revolving accounts. If you pay down to zero, keep them open and use every so often to keep them active. The longer you have had accounts open the better your score will be. The goal is to have accounts that are many years old.

Recent Inquiries (10%). Research shows that opening several credit accounts in a short period of time (which mean multiple inquiries) does represent greater risk-especially for people who do not have long established credit history.

Types of Credit in Use (healthy mix) (10%) is important. You need a mix of installment and revolving accounts. Make your payments and make them on time. Collection accounts, public records, foreclosures, and late payments all hurt your scores dramatically.

Call Frank and Jan at Universal Lending to answer your questions and concerns.

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The Giuliano Team