6 Components of a high credit score.
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was created by shark6
I see from this article what we haven known here at this bbs, pay bills on time, never, never pay late and keep the utilization rate low.
There are 2 ways that you can achieve a lower utilization rate: You can pay down your bills or if like me, you have a limited budget, you can request frequent CLIs(soft pulls of course).
During this past week, I have had a total of $5,205 in CLIs so I can't wait to pull my Fico next month this time to see if my score has increased. I'm hoping that it will have gone up about 10pts atleast.
Improve credit score by using credit cards
Q]http://www.bankrate.com/images_mra/spacer.gif[/img] 6 components of a high credit score
Pay on time.
Use a card every six months to keep it active.
Keep credit card accounts open (unless paying an annual fee).
Keep the ratio of credit available to credit used low.
Avoid new accounts (short-term). The negative effect of opening a new account lasts less than one year.
Paying off credit cards improves the score more than paying off other loans.
Q: Are there some things that are absolutely necessary to increase credit scores above and beyond paying on time?
A:Well, paying on time is huge. The second thing I would say is credit card utilization. A lot of folks think that (their score should be high) just because (they) are paying (their) credit cards on time and think, "They (the credit card company) wouldn't have given me a $5,000 limit if they didn't want me to charge $5,000."
The higher percentage of that $5,000 you're using, our research finds that you're of higher risk at that point. It's been proven. So, you want to keep those balances low and, at least in the short run, avoid opening new accounts. That's kind of a short- versus long-term strategy because the negative effects of opening new accounts are in the short term, and by short term I mean less than a year.
What makes up your credit score?
But the three things I would say are: Pay on time, keep your credit card balances low and avoid opening new accounts.
When I talk about keeping balances low, I've talked about credit cards only. Some people might ask, "What about other kinds of loans, student loans, auto loans?" The score really does not place much importance on how much you owe on those. I've talked to people who say, "I've just paid off my car loan early and it didn't help my score one bit." Well, that's because the score doesn't care if you paid off your car loan off early. You should've paid your credit cards off, dude. You should've called me first.
Bankrate.com's
There are 2 ways that you can achieve a lower utilization rate: You can pay down your bills or if like me, you have a limited budget, you can request frequent CLIs(soft pulls of course).
During this past week, I have had a total of $5,205 in CLIs so I can't wait to pull my Fico next month this time to see if my score has increased. I'm hoping that it will have gone up about 10pts atleast.
Improve credit score by using credit cards
Q]http://www.bankrate.com/images_mra/spacer.gif[/img] 6 components of a high credit score
Pay on time.
Use a card every six months to keep it active.
Keep credit card accounts open (unless paying an annual fee).
Keep the ratio of credit available to credit used low.
Avoid new accounts (short-term). The negative effect of opening a new account lasts less than one year.
Paying off credit cards improves the score more than paying off other loans.
Q: Are there some things that are absolutely necessary to increase credit scores above and beyond paying on time?
A:Well, paying on time is huge. The second thing I would say is credit card utilization. A lot of folks think that (their score should be high) just because (they) are paying (their) credit cards on time and think, "They (the credit card company) wouldn't have given me a $5,000 limit if they didn't want me to charge $5,000."
The higher percentage of that $5,000 you're using, our research finds that you're of higher risk at that point. It's been proven. So, you want to keep those balances low and, at least in the short run, avoid opening new accounts. That's kind of a short- versus long-term strategy because the negative effects of opening new accounts are in the short term, and by short term I mean less than a year.
When I talk about keeping balances low, I've talked about credit cards only. Some people might ask, "What about other kinds of loans, student loans, auto loans?" The score really does not place much importance on how much you owe on those. I've talked to people who say, "I've just paid off my car loan early and it didn't help my score one bit." Well, that's because the score doesn't care if you paid off your car loan off early. You should've paid your credit cards off, dude. You should've called me first.
Bankrate.com's
