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All About Credit


We are not a credit repair agency nor do we offer credit repair services or any credit repair related services. We do however offer complimentary credit reviews which can be used to get a general understanding of an individuals overall credit picture in order to formulate a plan to improve one’s credit score. The information below is meant to be educational and informative in nature. 

As insignificant as something like a credit score may seem, credit scores actually play a vital role in day to day commerce and can have such a huge impact as well as drastic implications on both your finances, career and overall life in general. Having good credit is used for so much more than just getting approved for credit cards or consumer loans, it can also affect your mortgage application. Having good or bad credit can not only affect where you live and how much you pay, but it can also affect other things like the kind of vehicle you drive and the payment for that vehicle, the job or career path you choose, your ability to start a business, etc. Establishing and building a good credit history can and will impact your quality of life in a number of ways, so understanding credit and how it works is not only important, it is actually quite essential. We want to provide you with some valuable insight that can help you take a more proactive approach to building and or maintaining a healthy credit rating.

It is also very important to have a good understanding of how credit scores work and how they can potentially affect your mortgage application. Credit scores, (also known as FICO scores) help determine your mortgage eligibility and pricing tier and help in making underwriting decisions more uniform and less subjective. Typically, the higher the credit score the lower the interest rate will be. Credit scores can range from 300 all the way to 850. There are 3 main credit repositories, TransUnion, Equifax, and Experian. Scores from these 3 repositories are what will be used in consideration when your Lender pulls your credit report. Although there are many different factors that help determine your overall credit score, there are primarily 5 categories that have the most significant impact on your score. 

Past Payment Performance


Past Pay Performance 35%

Your past payment performance comprises 35 percent of your total credit score and is the most important factor in calculating credit scores. According to FICO, past long-term payment history is used to forecast future long-term behavior.

FICO keeps a close eye on both revolving loans – like credit cards – and installment loans, such as mortgages  and or student loans.

By and large one of the best ways a borrower can improve their credit score  is by making timely and consistent payments.

Credit Utilization


Credit Utilization 30%

Credit utilization makes up 30 percent of your total credit score.

Borrowers who constantly max out their credit cards  or who always get very close to their credit limits are seen as people who have difficulty handing debt responsibly according to FICO.  Borrowers should always maintain low credit card balances. According to FICO, the people with the best credit scores tend to have an average credit utilization ratio of less than 6 percent. 

 Credit utilization is measured both by individual card and also across multiple cards.

Credit History


History 15%

Credit History – a record of a consumer’s ability to repay debts and demonstrated responsibility in repaying debts equates to 15 percent of a borrowers credit score.

It is virtually impossible for someone who is new in establishing credit to achieve a perfect credit score early on, however,  it doesn’t necessarily take a very long time to build up to a high score. Having a longer credit history paints  a better and more clear picture of long-term financial behavior. Thereby, in order to improve a credit score, a person without a lengthy credit history should begin utilizing credit, and those with established credit should maintain long-standing accounts.

Type of Credit In Use



The types of credit in use or (credit mix), comprises a total of 10 percent of a borrowers credit score. The types of credit in use is considered a somewhat vague category. However, experts do say that repaying a variety of debts is evidence that the borrower has the ability to handle multiple types of credit. Historical data demonstrates that borrowers with a good mix of installment loans and revolving credit generally represent less risk for lenders.


Credit Inquiries



Credit Inquiries or (new credit) like “types of credit in use” also totals 10 percent of a borrowers credit score. Those who are just now attempting to establish credit should avoid opening too many credit lines all at the same time. This  behavior can often suggest they are in financial trouble because the excessive inquiries indicate the need for significant access to a lot of credit.

Tips For A Better Credit Score

  • Do not max out your credit cards. Keeping your card balances at less than 35% of the credit limit is ideal. On the same token, do not zero out your balances either. Believe it or not, a minimal balance is better than a zero balance.
  • Without professional advice, avoid closing out accounts. Allow your loan officer’s experience to help you in determining what steps you can take to improve your score.
  • Make sure to always pay your bills on time.
  • Never formally dispute an account on a credit report. Disputed accounts on a credit report must be settled before loan approval. If you disagree with a creditor, do everything you can to resolve the issue. Paying off the account is better than formally disputing it. If you pay off a collection account or judgment, make sure to keep a copy of the receipt of payment on record. You will likely need it in the future.

Important Facts About Your Credit

According to My Fico (http://www.myfico.com/credit-education/credit-checks/credit-report-inquiries/) while you are in the process of shopping for a mortgage, inquiries from multiple mortgage companies within a 30-day period will have little to no effect on your credit score.

A divorce decree does not supersede an original contract with a creditor, and does not release one from legal responsibility to repay accounts. You must contact each creditor individually, and seek their legally binding release of your obligation. Your credit history can only be updated after receipt of the release.

Payments-in-full do not remove your payment history. Accounts that are paid as agreed remain on your credit report for up to ten years. Accounts not paid as agreed remain in your credit file for seven years, as measured from the “date of last activity.”

Collection accounts remain for seven years from “date of last activity.”

Courthouse Records (Liens/Judgments) remain for seven years from the date filed, with the following exceptions:
Bankruptcy – Chapter 7 and Chapter 11 remain ten years from the date filed. Credit accounts remain seven years from the date of last activity.
Bankruptcy – Chapters 13 non-dismissed or non-discharged remain ten years from the date filed.
Unpaid tax liens remain indefinitely.
Paid tax liens remain for up to seven years from the date released.


If you are considering refinancing, purchasing a new home, or simply planning for the future, but are unsure about where your credit is, your first step is to consult with a knowledgeable loan officer.

Checking and reviewing your credit with an expert will allow you to troubleshoot potential problems.


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Willow Bend Mortgage Company. NMLS# 297376. 5026 Holly Road, Corpus Christi, TX 78411. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. Not all applicants will qualify for all loan products offered. This is not an offer to enter into a rate lock agreement under any applicable law.


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