Low Credit Scores

October 1st, 2009

credit report

A low credit score can be caused by several factors. The way they rate your credit used to be as simple as ‘have you made any late payments or not’. Now they go much deeper.

Examples of what affects credit score

Length of credit history

Number of revolving accounts versus installment accounts

Insufficient length of credit history

Proportion of revolving balances to revolving credit limits is too high

Too many inquiries in the last 12 months

Too many accounts recently opened

Balances on accounts too high

Accounts not paid as agreed

Number of accounts delinquent is high

Past due or collected account

Too many accounts with balances

Too many accounts


This is just a very short list of all the different things that are now looked at. If you have a low credit score you cannot fix your credit overnight. It could take as little as a few months or quarters to get your score up to a better level that allows you to cross the minimum credit score limits, or to get better interest rates. But if your credit score is in really bad shape it could take a year, or multiple years, to repair your credit and substantially raise your credit score. Banks want to see that you have your act together and can maintain your credit score for the long term, not just for a few weeks or months, which is just long enough to apply for a loan application and get a mortgage. They want to see you have raised your credit score, and can maintain it there, for the long haul.

Categories for this post:

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

Leave a Reply