Tips for Improving your Credit Score!
April 10, 2020
Post by: Nathan Gillin
- Check the accuracy of your credit reports
- Know your credit history. What past credit decisions are impacting your score?
- 3 major credit bureaus: Experian, Equifax and TransUnion. Each has its own credit report and score for you based on your credit history (i.e. Everyone actually has three credit scores).
- Mistakes are not unusual, and it is good to check regularly.
- If you find an error, it is important that you file a separate dispute with each of the 3 major bureaus. Each error must also be filed individually.
- The key is to find out why the score is good or bad.
- Find exactly what you need to improve
Major credit score factors include:
- 35% Payment history (i.e. paying on time)
- 30% Amount of debt
- 15% Account ages/How long you’ve been borrowing and building credit
- 10% History of credit applications (i.e. too many applications makes you look desperate)
- 10% Account Mix: Lenders want to see you using both revolving and installment credit
- Credit cards (Revolving)
- Mortgage (Installment)
- Student loans (Installment)
- Car payment (Installment)
- Avoid exorbitant debts by paying on time
- Deadlines are there for a reason
- Meeting deadlines equates to zero interest
- Setting up payment reminders is a great way to stay on track
- Set your due dates to when works best for you
- Only open new credit accounts when absolutely necessary
- Opening and/or closing too many accounts in a short period of time can affect your score in a negative way
- This shortens the length of your credit history, something that you want to be as long as possible
- Raises your credit-utilization ratio (Earnings:Expenses)
For any questions or concerns that you may have, the team at CHM Lending is here to help you through every step of the way!