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Credit 101

May 27, 2020 Hannah Villars
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Thinking about buying a home? That’s great! The very first step in the process is to check your credit score. Knowing your score is important for many reasons. Your score determines the interest you will pay on your mortgage, or even if you can qualify for a mortgage at all. A high score tells lenders that you are reliable. You have paid your bills on time in the past and are likely to do so in the future. In short, you are a safe investment for a lender. On the other hand, a low score tells lenders that you are a risky investment. You may have missed bill payments in the past and therefore may do so again. If lenders approve those with low credit scores, they will do so at a higher interest rate to make the risk worth their while. Credit scores fall in the range of 300-850. The higher the score, the less of a risk you pose to investors. Your score indicates your creditworthiness or your reliability as a lendee. Credit scores are determined based on the following key factors: Payment History- this accounts for 35% of your score. It refers to your frequency of late payments.

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