Now a days you here a lot about credit scores and how they can effect you. Have you ever stopped to think about what a credit score is exactly?
Your credit score is made up of 5 areas:
- PAYMENT HISTORY – Accounts for 35% of your total credit score. Payments made after 30 days past the due date will drop your score.
- ACCOUNT BALANCES – This accounts for 30% of your total credit score. There is a fine line between balances that will help your score and balances that will lower your score. Your score will improve if it is about 1/3 the credit line. As the balance increases and approaches/exceeds the limit, your score will begin to decrease.
- THE LENGTH OF YOUR CREDIT HISTORY – This only accounts for 15%. There isn’t much you can do for this part of your credit except wait.
- Types of Credit – Accounts for only 10% of your score.
- Credit Inquires – Also accounts for only 10% of your score.
If you are wanting to raise your credit score, your best option is to concentrate on payment history and account balances. Within a few months you will see your work paid off, and your credit score raising.