Raise your Credit Score!
There is often a good deal of confusion over exactly what factors play a role in your credit score. It is generally understood that a history of on-time payments factors in heavily. However, most do not know that other factors play a very important role.
The following list is from USAA Magazine (Winter 2006, p 31).
RAISE YOUR SCORE
- Pay your bills on time – Payment history affects about 35 percent of your score. So do whatever it takes to be timely: Set up automatic payments online, keep stamps on hand, maintain your budget.
- Keep credit card balances at 30% of your credit limit, or lower – Around 30% of you score is based on how much credit you have access to and how much you are using. If you’re cutting it close to the credit limit on your cards, that will reflect poorly on your score.
- Don’t cancel credit cards to up your score – About 15% of your score is based on how long you’ve held your credit cards. A card that you’ve had for a few years is better for your score than one you’ve just obtained. Having no credit history at all can readily throw off the score, so do carry a credit card – just pay it off in full.
- Don’t apply for too many cards - About 10 percent of your score is determined by the number of times lenders request your credit report. Lots of requests might indicate that you are desperate for credit and might be headed into trouble, or are already there.
- Watch the kinds of credit you use – About 10 percent of your score is based on the types of credit you are using – secured loans such as car loans and mortgages, or unsecured loans such as student loans, credit cards, and so forth. Unsecured loans are considered riskier on you report.
I would take issue with only on point in this list. In number 3, it states that you should use a card, but “just pay it off in full.” It has been my own experience, both personal and professional, that carrying some balance, even $100, is better than nothing because it shows you know how to make a scheduled payment. But, if you are in a situation where this becomes a very big deal, there are larger credit issues that you are facing.
Bottom line – use your credit wisely and pay the bills on time. With that, all other things should work out.
Labels: Credit
posted by jkballentine @ 1:07 PM
2 Comments:
Great tips!
Just want to share this article about improving credit score, 5 Quick Steps to Improve Credit Score.
Hope this resource be useful to your blog and your readers.
Also, here is the list companies that approves bad credit creditcards for people with no/bad credit.
Good informative post right for those who want to improve credit score. My credit score is 710, but my aim is to have at least 800. I will use your tips to achieve my aim. It is no doubt, that we should always aspire to higher credit score. The higher credit score you own, the more benefits you can get.
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