FAQ #4 ……. How Can I improve My Credit Scores?

FAQ #4 ……. How Can I improve My Credit Scores?


The fourth guest blog post in a series of blogs of 10 most frequently asked questions that I am asked on a weekly basis.  Is one that I am

Frequently Asked Mortgage Real estate question

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asked almost seven days a week.

I Pre-Qualify several Borrowers on a daily basis.  Which means I look at a lot of Credit Reports, and unfortunately many Borrowers are not where they need to be credit wise.  Also when a Borrower contacts me wanting to be Pre-Approved for a mortgage it is because they want to purchase a property, and they want to purchase it now.  So when I pull their credit report and the cred scores are lower than what is required for the Mortgage Programs available today, the very next question that I am asked by those Borrowers is “How Can I improve My Credit Scores?”  Followed by “How can I Improve My Credit Quickly?”

There is nothing magical about Credit Scores.  What determines good or bad credit scores is really pretty simple.  You do not have to be a rocket scientist to figure out what you need to do once you know what makes your credit scores go up or down.

The Three Components That Have The Biggest Impact On Credit Score Are:  Credit History, Years of Credit, and Available Credit.

The first two are time related, therefore, it will take time for them to have an impact on the Credit Score.  The third however, can produce very quick and substantial results if the Borrower has the funds to do what needs to be done. 


  • Credit History: Represents 35% of a Credit Score, and it is the history of how well you have paid your bills during the time you have had credit. However, late payments, charge offs, or collections that are on the credit report, but have not reported for two years or more, very little impact on a credit score. In fact it is better to not pay off these collections, because that could actually bring down the credit score. That is because it will bring the last reporting date current again, and will now be reported as a current late once again. That is a double edge sword, because most of the time you will need to payoff collections regardless how old they are in order to qualify for most of the Loan Programs today.  Late payments can lower your Credit Score quickly, but it takes much longer to bring credit scores back up by just simply paying your debts on time.

  • Years of Credit: Also know as length of credit. This simply what it says.  It is the number of years that you have had credit, the longer the number of years with good credit the higher the score. This represents 12% of a Credit Score.

The third major component as I stated above, is the one that can quickly raise or lower Credit Scores.  Therefore, it is the best and quickest way for a Borrower to quickly increase their Credit Scores if they have the funds to do what they need to do.


  • Available Credit:  Represents 30% of a Credit Score.  Available Credit is the amount of credit that is available to a Borrower presently. In other words how much of the credit limit on the cards is still available. If the balance on a credit card is over 30% of the available credit limit on the card, it will have a negative impact on the credit score.  And if the Borrower has gone over the Credit Card Limit, it will have an even bigger negative impact on their credit.

So the answer to both “How Can I improve My Credit Scores?”  and  “How can I Improve My Credit Quickly?”  Is to pay down the balance on credit cards to less than 30% of the Credit Card Limit.  It is that simple if the Borrower has the necessary funds to do that.

 Depending on the number of credit cards, and how close they were to maxing out the credit card, they can easily see a 40 to 60 point jump in their credit in just one month if the balance on the credit cards can be brought down to no more than 30% of the credit card limit.

FAQ #4 ……. How Can I improve My Credit Scores?


This blog post is courtesy of my guest blogger, George Souto.  Info about my guest blogger and author:

 George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com


Ginny Lacey Gorman is your go to North Kingstown real estate agent for real estate in North Kingstown RI and beyond…knowing the geographic area, schools, happenings, important tidbits of information and businesses well.   Waterfront, oceanfront, luxury and coastal Rhode Island real estate are my specialty but all of RI is my backyard. When you are in need of a true real estate professional for your buying, selling or relocating needs and an internet savvy marketer and agent who sells RI houses in this real estate market call Ginny at 401.529.7849.