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A healthy mix of different types of credit, installment loans, retail accounts, credit cards, and mortgage. This score is not normally a key factor in determining your score but it can help a close score. Its not a good idea to try and open different types of accounts just to try and make this factor better. It will likely reduce your score in other areas. You should never open accounts you don't intend to use anyway. Your score takes into account:
- The optimal ratio of installment versus revolving accounts depends on your profile and differs from person to person. One factor that seems to have significant influence is your percent of open installment loans. Too many can lower this portion of your score.
If you are denied credit, you will receive four reason codes which indicate why you are denied. They are in order of importance. The first code has the strongest impact, followed in declining impact by the second, third and forth reason.
Below is a typical read out your lender will view. This particular read out presents information from all three credit agencies. This person failed to qualify for each credit agency and the reasons are listed in descending order.
***** BORROWER: SMITH, JOE M. *****
TU Score: [00623]
Reason1=[022] Reason2=[016]
Reason3=[028] Reason4=[004]
Experian Score: [00629]
Reason1=[022] Reason2=[016]
Reason3=[028] Reason4=[032]
EQUIFAX: [00617]
Reason1=[022] Reason2=[016]
Reason3=[028] Reason4=[032]
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See reason codes on next page.
All three credit agencies do not always have the exact same information therefore your three scores will differ slightly. As a general rule though, if you fail to qualify at one agency you are likely to still be denied if one of the other bureaus is checked. Most mortgage loans companies will run all three credit agencies and take the lowest score. |
