Confused by your credit report? Review the five areas below that affect your credit report/score and the tips to bring your score up.
Component that Affects Your Credit Score
Percentage of Your Score
How to Improve It
This includes payment information, adverse public records, the severity of your delinquency, the number of past due items and the payment amount agreed upon. Bottom line? Pay your bills on time.
Credit available on revolving debt
Check your credit balances and the percentage of credit used on each type. Keep the ratio low.
Length of credit history
The longer you have been building credit and the less you use your credit, the better. Start now if you haven’t already.
Monitor your credit report for recent account opening and credit inquiries. The longer time period since your last new account or inquiry, the better.
Types of credit used
Watch out for how many credit accounts you have open.
What actions will hurt the score?
• Missing payments (regardless of $ amounts … It takes about 24 months to restore credit of one late pay) • Credit cards at capacity (i.e. maxing out credit cards) • Closing credit cards out ( this lowers available capacity and the eliminates the history) • Shopping for credit excessively • Opening up numerous trades in a short time period • Having more revolving loans in relation to installment loans • Borrowing from finance companies • Transferring Balances
What doesn’t affect the score?
• Debt ratio • Income • Length of residence • Length of employment • Criminal Record or Personal Information
How to improve the score?
• Pay down on credit cards • Do not close credit cards because capacity will decrease • Continue to make payments on time (older late pays will become less significant with time) • Slow down on opening new accounts • Acquire a solid credit history with years of experience