When finding a mortgage, you will want to obtain the best possible rate for your situation. There are many factors that can affect your ability to obtain the best mortgage rate. Often people with less than perfect credit will be at a disadvantage for getting the best mortgage rates.

Did you know that having numerous credit cards with high balances can affect your ability to get the best rates? If you have missed payments and have too many credit accounts, this can have a direct affect on your credit score as well.

A FICO score is your credit score and lets potential lenders know how much of a risk you pose as being a potential borrower. A risk is defined as how likely it will be that you will not be able to pay the money borrowed or owed.

Generally speaking, a credit score ranges from 300 to 900 and is weighted by a number of different factors. Some of these factors tend to weight more heavily than others.

Having a good payment history is important because it accounts for 35% of your credit score. This factor looks into how well you have been able to make timely payments on the debts you owe. If you have missed payments repeatedly, have had debts roll over into collections or have foreclosures or bankruptcies, these can all have a negative effect on your credit score.

The current level of indebtedness accounts for 30% of your score. Having credit cards at or near their limit can signify that you have problems paying off debt and could have problems paying future debt.

What is the length of your credit history? This counts for 15% of your credit score. They look at the longest duration of time that your credit was in good standing? This score takes into account the most mature credit account as well as an average of all your new accounts.

Have you been active in trying to open new credit accounts? This accounts for 10% of your score and is another area that lenders think about before loaning money.

One thing they look at it is opening several new credit accounts within a short amount of time. This can often indicate to them that you are considered to be a high risk candidate.

Another thing they look at is the types of credit you have available. This accounts for 10% of your score. It looks at how many different debts you have. Having a combination of different retail accounts, mortgages, loans, credit cards and a car loan is better than having only credit card debt.

A person with a credit score of 750 and higher will get the best deals on mortgages and credit cards because this score is considered to be an excellent credit score. Only 27% of Canadians have scores within this range.

Other factors to take into consideration when reading about and understanding your FICO score is that often lenders will look at your work history. How long you have worked at your current employer? They will also look at breaks in employment and take this factor into consideration when making their decision.

Both negative and positive information will be listed on your credit report. Although having missed payments in the past can have a negative effect on your credit score, it is something that can be fixed. Over time making timely payments, reducing debt and not opening new accounts are ways that you can repair credit mistakes. With enough time these techniques can positively affect your credit score.