Building Credit: Here’s the Score

Your credit score indicates how likely you are to pay back a loan. Most lenders use the FICO credit score, which ranges from 300 to 850.
If your score is low, lenders may not be willing to loan you money at all – or if they do, they will charge you higher interest to compensate for the risk that they may not get their money back.

What is the best way to improve your credit score? As a lender, Freedom Mortgage cannot provide credit counseling to individuals – however, we can point you toward useful information that others have compiled.
The first step in improving your credit is to obtain your credit report. You can get one free credit report each year at

  • Read through it carefully
  • Make sure there are no mistakes, as that could affect your score

Your credit report may not contain your credit score. You can purchase your FICO scores directly from the three major credit bureaus:

Each of these credit bureaus uses a different formula to calculate scores, so slight differences are to be expected. If one score is very different from the others, you have the right to contact the bureau and dispute anything that may be in error. That is an important step in improving your credit score.

Other Ways to Build Credit
The Federal Trade Commission (FTC) offers useful information for improving your credit score at Here is a summary drawn from that site:

  • Pay your bills on time. Late payments and bankruptcies can lower your score.
  • Stay under your credit limit. As the amount you owe on a credit card gets closer to your credit limit, your score may suffer.
  • Don’t apply for too many cards or loans at once. While it is good to establish different types of credit accounts over time, if you open lots of lines of credit, it may negatively impact your score.

Also, the longer you have had a credit account open, the better it is for your score.

Credit Scores and Mortgages
Consult a tax accountant or financial advisor for guidance about your specific situation. If you are thinking about purchasing a home or refinancing, it’s good to know that some loan programs are easier to qualify for than others. For more information about your loan options, visit