If you take the time to improve your credit score you can actually save money. Don’t believe it, read on.
Save Money With A Good Credit Score
Every one of the following use credit scores and credit reports to evaluate you and your creditworthiness. They use your credit scores to determine how much they will charge you to work with you. In some cases if your credit score isn’t high enough, they won’t work with you.
Where You Can Save Money
- Your rent or mortgage payment.
- Your insurance premiums.
- Your auto loan or student loan.
- Your utility bills.
- Credit card interest rates.
It sounds like learning about ways to improve credit scores can be a good thing, doesn’t it? Improving your credit score is a great thing; but before you can improve your credit score you first need to know the breakdown of it. Then you can work on the areas that need improvement.
The Break Down Of Your Credit Score
Your Payment History
- Your payment history makes up the largest portion of a credit score.
- 35% of your credit score is based on your payment history.
- If you make late payments, you damage your credit score.
- Skipping credit card payments lowers vs improve your credit score.
- If you have past due accounts, you damage your credit score.
- Account balances sent to collection agencies severely damage credit scores.
- Missed, late payments, skipped payments, past dues and delinquent accounts all appear on your credit reports and they all damage your credit score.
* Improve your credit score by becoming diligent about paying your bills.
Your Credit Limits|Credit Utilization
- Your credit to debt ratio makes up the second largest chunk of your credit score.
- 30% of your credit score is based on this ratio.
- Creditors look at your credit limits compared to the amount of debt you carry.
* Improve your credit score by charging up to less than 35% of your credit limits.
The Length Of Your Credit History
- 15% of your credit score is based on your credit history.
- Creditors look at the length of time since accounts were opened and the amount of time since there was activity on the account.
- Credit inquiries.
* Improve your credit score by not opening a lot of new credit card accounts.
Your Account Mix
- 10% of your credit score is based on the types of credit you have.
- Credit cards
- Car loans, student loans
- Mortgage loans
- Installment loans
* Improve your credit score by having a mix of account types. It shows creditors that you can manage different types of credits; this is a positive for your credit scores.