Understanding Your Credit

How Your Scores Are Calculated

The all-important credit score - know exactly where you stand.

Credit scores range anywhere from 350-850. The higher the better. Your number is determined by five factors combined to calculate your personal score. Even if your score is lower than desired, don’t give up. With a little clarity and focus, a lot can be done to make things better.

Types of Credit - 10%:
This looks at what types of credit you have.

New Credit - 10%:
New applications for credit might cause you to be risky and lower your score.

Length of History - 15%:
How long your accounts have been open. If you are going to close an account, DO NOT close the oldest.

Payment History - 35%:
Making sure that you have your payments in full and on time.

Debt Utilization - 30%:
How active EACH of your accounts are will affect this portion of your score.

Do's and dont's

How to handle your credit during the mortgage process.


  • Immediately inform your Loan Officer if there are any changes in your employment, income, or assets.

  • Continue living in your current residence.

  • Continue making all mortgage or rent payments.

  • Continue to make payments and stay current on all existing credit accounts.

  • Be prepared with an explanation for any credit “blemishes” and recent credit inquiries.

  • Research and select a preferred homeowner’s insurance provider.


  • Make any major purchases or home improvements.
    (ie. auto, boat, appliances, furniture, pool)

  • Apply for new credit or loans.

  • Pay off any charge-off accounts, collections, loans, credit cards, or consolidate debt.

  • Close any credit card accounts, max-out, or over-charge credit accounts.

  • Change bank accounts of transfer balances from one account to another.

  • Change the source of your “closing funds.”

  • Deposit large amounts of cash into your own bank account without proper documentation.

The Dispute Process

How to dispute an inaccurate account through each credit reporting agency.


Brian Sapp NMLS ID# 295420 | CA DRE#: 01170429 | Branch NMLS ID# 1841782 | RM.804129.014

Summit Funding, Inc. NMLS ID# 3199 (www.nmlsconsumeraccess.org). Licensed by CA Dept of Business Oversight #6072526,

CA Bureau of Real Estate #01220358, AZ Lic# 0925837, GA Lic# 39456, Illinois Residential Mortgage Licensee.

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Equal Housing Opportunity. Fair Housing & Discrimination violations will be reported online to HUD's local FHEO Regional Office or by calling the Fair Housing Complaint Hotline at 1-800-669-9777

Last Revised: 7/03/2019

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