Improving your credit
POSTED IN ADVICE ON MONDAY, MAY 6, 2019
Learn how you can influence your credit score.
Your credit score may not be very visible in your day-to-day routine, but it can have a big effect on your life. Taking out a loan, renting an apartment and getting a job can rely on this hidden number.
Credit scores range from 300 to 850 – and the higher it is, the better. Here are the five factors that go into your credit score, from most important to least important:
- ♦ Payment history: 35%. Creditors like to see timely payments – and they like to see them recently. If your score takes a hit from a late or missed payment, the effect will fade as time passes.
- ♦ Available credit: 30%. This considers both the amount of money available to you through all types of credit and how much you’ve already used.
- ♦ Length of credit history: 15%. The longer you’ve had credit, the better.
- ♦ Credit mix: 10%. Ideally you have both installment credit (like an auto loan) and revolving credit (credit cards).
- ♦ Credit inquiries: 10%. New credit applications or debt in the last 12-18 months can negatively affect your score, so be sure to consider that before applying for a new credit card.
Every day, your financial actions can raise or lower your credit score. Here are some tips:
- Make your payments on time, even if it’s only the minimum amount due.
- Use more installment credit than revolving credit.
- Avoid keeping credit cards at their limit.
- Don’t cancel multiple credit cards at the same time.
If you'd like to discuss your unique financial situation, fill out the form below.