Merchants Home Loan is a HUD approved mortgage lender in Phoenix, AZ and San Diego, CA

Your Credit Score Explained

Your credit score is calculated from a variety of credit data that can be found in your credit report. This data can be grouped into five general categories as shown below. The percentages in the chart reflect the importance of each category in determining your score based on the general population. The importance of these categories may be somewhat different for specific groups of the population such as: "People who have not been using credit very long."

Payment History

Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
Presence of adverse public records (bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
Severity of delinquency (how long past due)
Amount past due on delinquent accounts or collection items
Time since an occurance of "past due items", "delinquency", "adverse public records", or "collection items"
Number of past due items on file
Number of accounts paid as agreed

Amounts Owed

Amount owing on accounts
Amount owing on specific types of accounts
Lack of a specific type of balance, in some cases
Number of accounts with balances
Proportion of credit lines used (proportion of "balance" to "total credit limit" on certain types of revolving accounts)
Proportion of installment loan amounts still owing (proportion of "balance" to "original loan amount" on certain types of installment loans)

Length of Credit History

Time since accounts opened
Time since accounts opened, by specific type of account
Time since account activity

New Credit

Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
Number of recent credit inquiries
Time since recent account opening(s), by type of account
Time since credit inquiry(s)
Re-establishment of positive credit history following past payment problems

Types of Credit Used

Number of various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

Please note that:
A score takes into consideration all these categories of information, not just one or two.

No one piece of information or factor alone will determine your score.

The importance of any factor depends on the overall information in your credit report.
Different factors may be more important for different people in determining their credit score. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. Thus, it's impossible to say exactly how important any single factor is in determining your score - even the levels of importance shown here are for the general population, and will be different for different credit profiles. What's important is the mix of information, which varies from person to person, and for any one person over time.

Your Credit Score only takes into consideration information found in your credit report.
However, lenders may take into consideration additional information such as your income, how long you have worked at your present job and the kind of credit you are requesting.

Your Credit Score is based on both positive and negative information from your credit report.
Late payments will lower your score, but establishing or re-establishing a good track record of making payments on time will raise your score.