A QUICK AND EASY GUIDE TO UNDERSTANDING YOUR …



A QUICK AND EASY GUIDE TO UNDERSTANDING YOUR CREDIT SCORES

The highest credit score is 800+, which allows for the best interest rates and lower monthly payments

What makes up my credit score?

• 35% = Payment History

• 30% = Available credit on revolving accounts (capacity)

• 15% = Length of credit

• 10% = Accumulation of debt

• 10% = Mix of credit

What types of actions lower my credit score?

• Late or missing payments

• Using the entire amount of available credit on credit cards

• Closing credit cards out (reduces capacity)

• Excessively applying for credit

• Opening numerous accounts in a short period of time

• Having more revolving loans in relation to installment loans

What does not affect my credit score?

• Debt ratio

• Income

• Length of residence

• Length of employment

Approximate credit weight for each year:

• 40% = Current to 12 months history

• 30% = 13-24 months history

• 20% = 25-36 months history

• 10% = 37+ months history

What can I do to improve my credit score?

• Lower credit card balances. Generally, keep card balance lower than 1/3 of available credit

• Do not close credit cards (reduces capacity)

• Make payments on time

• Do not open numerous new credit card accounts

• Do not transfer high balances from one account to a new account because of enticement of lower annual percentage rates

• Acquire a solid credit history with years of experience

• Move large amounts of revolving debt into installment debt

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