Factors That Affect Your Credit Score Out of all of the components that influence whether or not you are approved for a mortgage, your credit score is perhaps the most important. Before you apply for a VA home loan, you should learn what your credit score is and what factors play a role in how it is determined.
Payment History Your payment history is arguably the most important factor that influences your credit score. When assigning you a score based on your payment history, all three credit bureaus take into consideration criteria like: late payments collection activity defaults charge offs bankruptcies foreclosures liens and garnishments judgments These factors determine 35 percent of your credit score. Their presence on your credit file can cause your score to fall below the acceptable average of 620.
Balances Along with your payment history, the balances that you carry on open lines of credit also will determine your credit score. Balances, or the amounts that you owe, account for 30 percent of that score. When you carry high balances on credit lines, your score may be negatively impacted. The credit bureaus also consider: availability of credit on open accounts types of accounts like mortgages, car loans, credit cards, etc total amount owed on all accounts including installment accounts To keep your score as high as possible, you should pay off high balances and keep as much open credit as possible on the reported accounts.
New Credit and Types of Credit in Use