Its finally FRIDAY. This week has been a long one for me, I got slammed with influenza (how did I not remember your teeth hurt when you have a high fever!?). So since its been such a 'fun' week, hey, why not, let's talk about CREDIT CARDS!
What you may ask do credit cards have to do with buying a house? Well, frankly, more than you expect. It's this pesky thing called YOUR credit score (see list below). Its one thing if you have credit cards and carry balances you pay off each month. Its another thing if you are only making minimal payments. So, #4 impacts #1. Oy.
Your score is most influenced by TWO things: HOW you pay your debts & HOW MUCH DEBT you owe."
So here is the brass tacks of your credit; the Fair Isaac Corporation (FICO 'score') says these factors (& weights) drive your credit score.
• Payment History (35%) : account payment info, bankruptcy or judgments, how long overdue payments are, amount past due, & the time since any adverse occurrences.
• Amounts Owed (30%) : amounts owed on accounts individually & totaled together as a whole, number of accounts with balances, proportion of credit line used & proportion of installment loan amounts still owed.
• Length of Credit History (15%) : time since you accounts have been open as well as the time since your accounts have been active.
• New Credit (10%) : number of & time since recently opened accounts & proportion to total accounts, number of & time since recent credit inquires, & the re-establishment of positive credit history following past payment problems.
• Types of Credit Used (10%) :number of various types of accounts, like credit cards, retail accounts, installment loans, mortgage, etc.
So, WHAT DOES THIS MEAN if you want to buy a home?
It means be THOUGHTFUL before you decide opening another store credit card is a good idea (even IF you get 10% off today's purchase....TRUST me the 10% off your $1,000 purchase dims in comparison in what it means for your mortgage rate terms).
One last list, I promise! #1, 3, 4, 7 all relate to your credit card! The pretty plastic square should come with a Danger sticker on it!
Want to learn more about business considerations for credit cards, see Best Busienss Credit Cards.
EXTRA CREDIT IF YOU CAN FIND MY PHOTO IN THIS ARTICLE!
Happy Friday peeps, and make good life choices--especially credit wise!
Hi, I am Summer, real estate agent in NE Iowa. This blog is about life, of which Real Estate is a part of. Happy reading!