What can I do to have a great credit score?
There’s an old song that goes “you’ve got to accentuate the positive and eliminate the negative.” This is good advice for developing and keeping a great credit score. Certain actions or patterns raise your score, and others lower it.
What things help my score?
There are three key areas that help your score. The first is paying your bills on time. Your bill paying history accounts for 35% of your credit score. Pay your bills on time. Another 30 % of your score relates to amount you owe in relation to your available credit. You should not carry balances of more than 25 % of your credit limits. It’s better to have 25 % balances on two credit cards than a 50% balance on one. The third key element is to stay employed, preferably at the same place for a long time. For some reason, you’re perceived as being better able to pay bills on time if you have a steady job.
Video: How to Raise Your Credit
Score FAST!
What things hurt my score?
The first category of things that hurt your score is the same three factors that help your score. A history of late payment hurts, as does maxing out your credit lines. Not having a jobs also makes creditors (and credit reporting agencies) very nervous. Additionally, going through bankruptcy or foreclosure costs you major points, as does having liens on your property. Another important source of negative points is applying for lots of new credit. If you keep trying to get new credit cards or loans you lose a lot of points. If you have to get a loan (need a car, etc.) try to make your applications in a short period of time. Mortgage applications should be done in a one-month period instead of being spread out. This minimizes the points lost from your credit score.
Video: How to Build a Good Credit
History
How can I keep track of all these things?
You can, of course, get very organized, make a spreadsheet, and
personally record all of your transactions. That’s a good thing to
do, but many of us have trouble being so organized. You can also
hire someone to do it for you. Although an accountant could do it,
that would be an expensive way to handle it. Credit
reporting/monitoring services will do this for you at a fraction of
the cost of having your personal accountant or someone similar do it
for you. One of the most important things such services can do is
discover problems early. Early detection of
identity theft can cut your losses to zero, literally. These services normally
provide unlimited access to tour credit report for the same fee,
allowing you to observe the results of your actions. If you are
trying to repair your credit that can be very helpful.
The bottom line is that you will improve and maintain your scores more effectively if you are paying attention, and you consider the effect of your actions on your scores before you act.
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