Are you a borrower in Washington D.C., Maryland, or Virginia? Do you want to buy a home in 2025? Your credit score is extremely important. It opens doors for you. A good score gets you a great loan. It can save you thousands in interest. We help you understand your credit profile. This market is fast-paced. A strong credit profile is a must.
How is my credit score calculated?
Your credit score is based on several key factors. The FICO model is the most common. Here is how your score breaks down:
- Payment History (35%): This is the most important factor. Lenders want to see on-time payments. A single late payment hurts your score a lot. You should set up automatic payments. Always pay at least the minimum amount due.
- Credit Utilization (30%): This is the amount you owe. It is a percentage of your total available credit. Experts suggest keeping usage below 30%. For a top score, aim for less than 10%. You can pay your bill twice a month. This keeps your reported balance low. A lower utilization ratio helps your score quickly. For more, read our post on “What is the 30% Rule of Housing?”.
- Length of Credit History (15%): Lenders like a long history. Do not close old accounts. This shortens your average account age. A longer history shows responsibility. It proves you handle credit well. Keep old accounts open. Use them occasionally.
- New Credit Inquiries (10%): This happens when you apply for new credit. A hard inquiry is placed on your report. This can lower your score. Be strategic with your applications. Group mortgage loan applications together. Do this within a two-week window. They count as one inquiry.
- Mix of Credit Types (10%): Lenders like to see a variety of loans. This shows you can manage different debts. Examples include auto loans and credit cards. Do not open new accounts for this. Focus on the other, more important factors.
How can I improve my credit score fast?
You can take simple steps to boost your score.
- Monitor Your Credit Report: Get a free copy each year. You can check it from each bureau. The three major bureaus are Equifax, Experian, and TransUnion. Look for any errors in your report. Dispute incorrect information immediately. Fixing errors can raise your score fast.
- Build Your Credit History: Use a secured credit card. It requires a deposit. The deposit becomes your credit limit. On-time payments are reported. This helps you build credit fast. Credit-builder loans are also an option.
What if I need a private loan?
A private loan offers flexibility. You can get one from a private lender. You must still have a solid plan. A good credit profile is always helpful. To learn more, read our blog post titled “What Do Private Lenders Look for in a Borrower?“. Our team at Local Private Lenders can help you. We are a certified subsidiary of Brickfront Properties and Construction, and we provide financing for all kinds of properties.