Important Facts about Credit Reports and Credit Scores

credit scores

So now that I know my Credit Score, what does it mean?

When evaluating a borrower for a mortgage loan, we look at all three credit bureaus (Experian, Transunion and Equifax). We call it a “Tri-Merge” report. The underwriter will use your middle credit score when evaluating your file for approval. For example, if you have a 720 score with Experian, a 745 score with Transunion and a 700 score with Equifax, we would use the 720 score. This is also the score that we use to determine interest rate pricing (the higher the score, the cheaper the rate).

Look up your middle credit score in the chart below:

Score RangeCredit Range
760 to 850Excellent
700 to 759Very Good
660 to 699Good
620 to 659Below Average
580 to 619Poor
300 to 579Very Poor


There are very few options available to those with credit scores below 580, but some programs are out there.

Components of a Credit Score

Your credit scores are calculated based on multiple factors. Here’s a great breakdown for you:

Components of a credit score

FactorApprox % of Score
Payment History35%
Balance to Credit Limit Ratio30%
Length of Credit History15%
Credit Mix10%
New Credit10%

Here are some common questions we are asked about credit reports:

What is a soft credit inquiry?When an existing creditor or marketing company runs your credit. Does not affect your credit scores.
What is a self-made credit inquiry?When an individual requests their own credit report. Does not affect your credit scores.
What is a hard inquiry?When creditors or lenders request your credit report to determine whether to extend new credit. This does negatively affect your credit scores.
How long do negative activities stay on your credit report?Chapter 7 Bankruptcy – 10 years
Chapter 13 Bankruptcy – 7 years
Foreclosures – 7 to 10 years
Charge offs and collection accounts – 7 years
Late payments – 7 years
Trade account closed by creditor – 7 years
Tax Liens – 7 years from date paid in full
How long do credit inquiries stay on your credit report?Up to 2 years
What are common types of derogatory credit or conditions that negatively affect my credit?Multiple late accounts
Carrying high balances on credit cards
Delinquent housing payments
Adverse public records like Judgments, Tax Liens, Bankruptcy
Questionable credit practices during the past 24 months