The most important thing you can do to IMPROVE YOUR CREDIT SCORE is to eliminate debt!
One of our customers resently sent us an email stating:
"My credit score according to my credit tracker just JUMPED to 693! That's the highest it has been in fifteen years."
This client had just completed the DEBT SETTLEMENT program, and his credit report showed all of his accounts had ZERO BALANCE!
According to the FICO, there are several factors that determine your credit score:
This makes up 35% of your score and is determined by:
Past due accounts
Paid as agreed accounts
AMOUNTS YOU OWE
This will account for at least 30% of your credit score and includes:
- The total amount you owe on all of your accounts
- The number of accounts you have opened with outstanding balances. (Too many accounts hurts your score, so be careful when offered the next STORE CARD!)
LENGTH OF CREDIT HISTORYYour credit history will account for 15% of your credit score.
- If you have established a decent credit score for several years, you will be rated higher than someone with little or no credit history.
- If you have not established credit (credit card, auto loan, home loan), then you should consider opening a couple of accounts.
BE CAREFUL! Many people get caught up in the nightmare of too many credit cards and not enough money to keep up. The best way to start establishing your credit history is to open ONE CARD, use it wisely, and pay it off each month!
Your are proving that you have the ability and discipline to manage your credit and will be rewarded with a higher score in the future.
This goes with the previous category, but is a little different and makes up 10% of your credit score.
If you open too many accounts in a short period of time, this is seen as a negative on your report, so take it easy! Also, if there are several inquiries about your credit score in a short amount of tim, this will hurt your credit score.
On the other hand, if a creditor inquires about your credit in order to offer you a "pre-approved" card, this will not hurt your credit.
Too learn more about how inquiries affects your score, click here.
TYPES OF CREDIT USED
This accounts for 10% of your score.
- Having too many store cards and "easier-to-get" credit cards will hurt your score.
- If you have a home mortgage and have a good payment history, this will be a positive for your credit score.
The best way to improve your credit score is to eliminate debt!
If you would like to find out what options are available to you, we can help!