Three Issues To Consider Before You Apply For A Loan .

Number one, and this is the most important—be sure to pay your bills on time. More than one-third of your credit score is based on your payment history, and the later you are in sending that payment, the more points you lose. Negative items will can affect your score for up to 7 years, but as time goes by their impact does lessen.

Number two: Hold your balances to 25 percent or less of your available credit amount. You can count that the amount you owe makes up about another third of your credit score. But your “credit utilization ratio” the percentage of your credit limit that you’ve actually used, is viewed higher than the amount of credit to which you have access.

Number three: Do not open too many new accounts at the same time. If you open numerous of new accounts especially if you’re fresh out of college, lenders worry that if you might go on a borrowing binge. Especially hold off on opening new accounts if you want to apply for a mortgage. FICO scores, by the way, range from 300 to 800. The median score is 723. Remember you are  entitled to 1 free copy of your credit report per year from each of the three major credit bureaus. To get a copy, go to www.annualcreditreport.com, or call 877-322-8228.

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