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What should you know about your CREDIT? Part II

Last updated 1 year ago

Our last article from Ray Schantz explained what a credit score is and why you should be aware of your score...

How can I keep my credit score high?

Your score is comprised of the following:

·       35% - Payment History: Do you pay your bills when they are due? A 30-day late payment can decrease your score by 40 points!

·       30% - Balances: How much do you owe compared to the original amount of the loan/credit?

·       15% - Time: How long have you had active credit? Creditors look for at least 3 lines of open credit.

·       10% - Type: What kind of credit cards/loans do you have? Small finance companies combined with a large # of open credit cards can lower a score by as much as 40 points.

·       10% - # of Inquiries: Opening several new credit accounts in a short period of time can be detrimental to your credit score. So next time you’re at the mall, don’t say yes to every department store clerk offering you a store credit card thinking it will improve your score.

It is recommended that you have 3 to 5 active accounts. Although it may sound counterintuitive, it is better that you have a balance on each account that you are actively paying than having no balance at all. So use your credit, pay it on time, don’t open too many accounts at once and your score should be fine.

 

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