Improve Credit Score To Highest Level

Whether you are applying for a car loan, mortgage loan or shopping your insurances, you want to have the highest credit scores possible.   But what do your credit scores and loans or insurance have to do with each other?  Everything!!

Your credit scores will determine whether or not you are extended a loan or denied a loan.   Your credit scores will determine what your interest rates will be on your loan.   Your credit scores will determine what insurance premiums you pay.    If you like wasting your  money, than ignore the financial advice given over and over about ways to improve your credit scores.

So the next time you are about to apply for any loans or shop for a new insurance company you may want to check out your credit scores.   You can order a free credit report once a year from each of the annual credit reporting agencies; be sure to do so.

Improve Credit Scores|Know How Your Score Is Calculated

Your Debt To Credit (30%)

This is the amount that you owe on your credit cards compared to the amount of credit that you have available.   The financial industry refers to this ration as your credit utilization ration.   Your credit utilization ratio makes up 30% of your credit score.

Thirty percent is almost one-third of your credit score.   Do yourself a favor if you want to improve credit scores; do not max out your credit cards, when you do, your ratio shoots up.   You should aim to have a credit utilization ratio of approximately 25%; which means that you should only use 25% of the credit card limits available to you.

Your Payment History (35%)

Payment history and highest credit scoresYour payment history shows creditors and lenders how you pay your bills.   Do you pay late, do you skip payments, do you let payments go to collections?    Your payment history is so important to financial companies that it makes up 35% of your credit score.

Late payments are a big no-no when you are trying to improve your credit scores.   Payments made over 30 days late are the benchmark creditors use; these late payments could lower your score by 100 points.

Skipping payments and collections are another bad idea if you are trying to improve credit scores.   The financial industry takes these actions very seriously.   When you skip payments or end up in collections, financial companies judge you as being financial irresponsible; whether you are or not is not the point.

Your Credit Length (15%)

The longer creditors see that you have been responsible for managing your credit, the better.   A long credit history shows creditors and lenders that you may be financially responsible.