In order to start building your credit score, you have to understand how your score is calculated and what things creditors look for in your financial history to determine that number.
What is a credit score?
A simple yet crucial question to understand: Your credit score is a three digit number that is designed to predict the possibility that you won't pay your bills. Whether you're trying to get a loan for a home or tuition, lenders can charge you higher interest rates if they see you probably won't be on time or pay your loan back at all.
This number is between 350 and 850 and is based on your borrower's bill-paying history, debt profile and statistical information that determines credit behavior. Intricate stuff, but now you just need to know what you can do to improve it. Once you've gotten the break you needed through credit repair, it's time to maintain your higher score and build upon it.
TO REMEMBER
- Concentrate most about paying all credit related bills ON TIME first.
- Set up auto-payments for at least the minimum payment and then pay more when you are able to.
- Treat your credit as a privilege and not as a right.
- Keep a budget, and don't use credit for things you are not able to afford.
- Make sure you always have credit available because when you need it, it's hard to get, but when you don't need it, it's really easy to get.
- Keep your old credit accounts open and check your report on a monthly basis.
- Know what is on your report.
You will learn where to put your focus so you can maximize your credit score. You will know what your rights are so the big bad creditors or collectors can’t push you around anymore. If your credit is suffering we can help it get back in order PRONTO.
With the busyness of life and the stress of money on your mind, a missed payment can happen. We understand, but making a habit of it is the first factor that lowers your credit score. Creditors look at the last time you were late (the further that time was, the better), how often you make late payments, and how late did you make the payment.
Not only do creditors look at the total amount you owe, but how much of your limit you are using. Creditors divide your balance by the limit. The bigger the gab between your balance and the limit, the better.
Typically, the longer you've had credit, the better. The score considers the age of your oldest account and the average age of all of your accounts.
Applying for lots of credit in a short time can be bad for your score. Piling on new credit quickly and when you don't have a long credit history worries lenders.
Having a mix of credit shows lenders you can manage the responsibility. Creditors recommend having a balance of revolving debts such as credit cards and installment loans like a mortgage.
Pay all accounts on time.
Maintain Low Credit Balances
Don't stop learning!
We can help.
The Credit Repairmen won't just help you raise your credit score temporarily. Our experts will work with you every step of the way to educate you in maintaining and building your credit.
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