There are some key points for you and your borrower to keep in mind about credit scores
- 35% is based on your payment history for all accounts.
- 30% is based on the amount you owe, especially revolving accounts.
- 15% is based on how long you have been using credit.
- 10% is based on your applications for new credit.
- 10% is based on types of credit used.
How can scores be improved with an ARC Rapid Re-Score?
- Pay active past due accounts to a current status.
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- Pay down outstanding revolving debt as close to zero as possible. If your borrower is unable to pay off accounts completely, pay them below 30% of the credit limit.
- Request deletion letters for any derogatory information that does not belong to the borrower.
- Only rescore collection or charged-off accounts if the account has been paid over 12 to 24 months ago. If the borrower pays a collection in the current month it may not affect the credit scores.
- Don't close existing accounts. This may affect the length of credit history and lower the credit score.
- Don't open numerous new accounts prior to loan funding.
- Contact an ARC Customer Service representative prior to re-scoring bankruptcy files.
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