Giving your credit score a boost can have a positive effect on whether a lender will give you a loan. Whats more, with a high credit score you can perhaps negotiate favorable rates on credit cards and loans. Knowing the elements that make up your credit score contributes to a higher rating.
Timeliness and Scores
You can give your personal score a boost by simply adjusting your payment habits and recognizing the importance of paying by the due date. Creditors tend to mail statements and due dates well in advance. Some debtors wait until the last minute to submit payments, which can increase the likelihood of a late arrival. Lateness also triggers late fees and possible interest rate increases. Timeliness makes up 35 percent of FICO scores, and keeping a high rating is dependent on how well you regard due dates.
Outstanding Debts
The less you owe, the more it benefits your credit history in numerous ways. Owing a low balance on credit cards helps improve your credit rating, and the less you owe to creditors, the more money you can acquire when financing a car or house. Outstanding balances make up 30 percent of FICO credit scores, and debtors hoping to give their score a fast boost can add points by paying down high balances, then paying off new charges each month as fast as is feasible.
Length of Credit
Recognize the danger of closing credit card and older accounts. The length of credit history -- which is the number of years that you've had accounts opened -- makes up 15 percent of your credit score. Regrettably, some debtors choose to close older credit cards to decrease their number of credit cards. This simple move can hurt FICO scores because shutting down an older account can decrease a debtor's credit history. Debtors who want to cancel a few accounts should start with the youngest accounts first, and keep older accounts active.
Other Factors
According to Myfico.com, other factors such as new credit and types of credit make up 10 percent of credit scores. Debtors looking to increase their personal scores should not disregard these factors, and should practice good habits to build a strong history. A combination of accounts helps strengthen the score. For example, debtors may acquire a couple credit cards, an auto loan, and perhaps another type of loan to create a mixture. Debtors need to watch their number of credit inquiries carefully, because applying for too many accounts in a short period can lower scores. If a batch of inquiries happens within a short period of time in the search for such things as a mortgage, an auto loan, or a student loan, credit reporting companies typically will not count these as multiples or against your score.
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