Credit Tip #1–

Knowledge is power, right? Hopefully you’ve already ordered your free copy of your own credit report. Now, I will tell you something about it.

There are several different types of credit on your report, and different factors that all add up to your score.

Having a negative payment history is the single biggest factor, it can account for up to 35% of your score. If you have late or missed payments, that is the first thing you need to work to correct. If there are mistakes, have them fixed. If YOU made the mistakes, that’s ok, but you need to get out of that habit and make your payments ON TIME.

15% of your score is based on the length of your history*. Older debts are more important, and better for you than new debt. *a tip about that will be posted in the future 🙂

The TYPE of credit you have accounts for about 10% of your score. You should have a mixture of revolving debt (credit cards), installment loans, and your mortgage.

10% of your score comes from if you have new credit lines or not. Your number actually goes down for about 2-3 months when you get a new line of credit.

A big, honkin’ 30% of your credit score is based on how much you owe and what your ratios are. Of course we will spend plenty of time talking about this in future posts, so come back often!


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