The five components which make up your credit score are:
1) Payment History (35%)
Make sure payments are paid by the due date listed or within grace period. When payments are 30 days late or more it can be detrimental to your score resulting in a possible 60 point hit. If this does happen be sure to payoff the account as soon as possible.
2) Amounts Owed (30%)
Keep your revolving debt at a maximum of 30% or less of your availability. Avoid maxing out credit cards and line of credit.
3) Length of Credit History (15%)
Lenders prefer to see a history of credit of at least 2 years worth or longer to show responsibility and discipline on payments.
4) New Credit (10%)
Avoid applying on loans & credit cards with multiple companies, even when you are "pre-approved". Also, don't card hop just to get better interest rates. When you anticipate applying for financing, don't apply for anything within 60 days before hand.
5)Types of Credit Used (10%)
Lenders want to see a balance of credit used such as revolving and installment to show good financial management. If your scores have been damaged due to various situations keep in mind there are ways to improve your credit but unfortunately not over night.
Depending on what the scenario may be such as financial
mismanagement, bankruptcy, or identity theft you can work towards
improving your credit with patience, discipline & perseverance.
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WayNet Member: West End Bank
Member Website: http://www.westendbank.com
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