One way to improve your credit score is to know what you’re being accounted for. You can also call the credit agencies to see what you can do to bring down your score.
Many times though, the credit agencies keep their models top secret, but The Credit Repairmen know this much about factors that affect your credit score and their level of importance.
1.Your Payment History: 35 percent
– Your record of bill paying says a lot about how responsible you are with credit. When it comes to negative marks like late payments, the score focuses in of 3 factors:
- a. Delinquency – This is the last time you were late. The more time that passes the better
- b. Frequency – Someone with one late looks better than someone with a dozen.
- c. Severity – “Hierarchy of madness,” a payment 30 days late is not as serious as a payment 60- or 120-days late.
Collections, tax liens and bankruptcies are “credit killers.” Think of them as an atom bomb to credit scores.
2. How much you owe: 30 percent –
The score looks at the total amount owed on all accounts as well as how much you owe on different types of accounts (mortgage, auto, etc). Using a higher percentage of your limits will worry lenders and hurt your credit score. People who max out their limits have a much greater risk of default. When it comes to revolving debt-credit cards, the formula is the difference between your high limit and your balances: $200 bal / $400 limit=50%.
The bigger the gap between your balance and your limit, the better.
3.How long you have had credit: 15 percent –
Less important than the previous two factors, but it still matters. You can still have a good score with a short history, but typically the longer you’ve had credit, the better. The score considers:
- a. The age of your oldest account
- b. The average age of all your accounts
4.Your Credit Inquiries: 10 percent –
Opening new accounts can ding your credit score, particularly if you apply for lots of credit in a short time and you don’t have a long credit history. Consider the following score factors:
- How many accounts you’ve applied for recently
- How many new accounts you’ve opened
- How much time has passed since you applied for credit
- How much time has passed since you opened an account
5. Types of credit you use: 10 percent –
The FICO score wants to see a healthy mix of credit, but they are vague on what this means. They recommend you have a balance of both revolving debts like credit cards and installment loans like auto loans or a mortgage.
Have questions, call The Credit Repairmen. We know credit and are ready when you are to improve your credit score today. Call us at 210-520-0444.