Your credit score is the magic figure behind most aspects of your life. How much you pay for utilities, mortgage payments or rent, insurance, your car, and even whether you get hired are all dependant of your credit score.
This article will help you understand each component of your total credit score. For more details on your credit score you can see this article and more at www.PerfectCreditFast.com.
PAYMENT HISTORY accounts for the most significant aspect of your credit score at 35% of your total overall score. This factor of your total credit score is based on your over all payment history with all of your creditors. If you have any late payments, defaulted credit accounts, and all other bad or adverse information on your credit report has the most significant effect. The more good paid-as-agreed accounts you have and the less bad negative accounts, the higher your credit scores will be.
Your PERCENTAGE of HIGH CREDIT USED is the second largest factor included in the makeup of your credit score accounting for a total of 30% of your total score. This aspect of your score is based on the amount you owe on your individual accounts relative to your high credit limits on those accounts. You will be scored higher if you owe 30% or less of the high credit limit AND, if you are carrying HIGH credit card balances you can actually hurt your credit scores almost as much as paying the account late every month.
Your time in the credit bureau or LENGTH of CREDIT HISTORY accounts for 15% of your credit score. The longer you have had credit accounts for, the higher your credit score will be. As you have more accounts throughout your life time and your credit history grows, your credit scores will naturally increase due to this factor.
Your total ACCUMULATION of NEW DEBT accounts for 10% of your credit score. Your score takes into account how much credit you are applying for in a short period of time. It considers how many inquires you have for new credit within a 1 year time period. If you have a lot of inquiries in a short period of time, your scores will be lowered as a result.
A total of 10% of your credit score is made up of the “mix” of credit items you have on your credit report. This part of your score is affected by what spread of accounts you have and how many of each. The bureaus will score you higher if you have a home mortgage on your report with, 3 credit cards, 1 car loan, and a minute mix of other accounts. Any unhealthy account mixes lower your scores.
To obtain the best credit score make sure you pay your accounts on time, do not keep high balances on your open accounts, keep a healthy mix of credit accounts open always, and do not apply for too much new credit in a short period of time.
If you follow the steps in this article you will be on your way to an 850 perfect credit score. If you have credit issues along the way, do not worry we are experts in fixing those problems and enforcing your consumer credit rights www.PerfectCreditFast.com.
