Do you know your credit profile?  Why is a credit profile so important?  Your credit profile determines your creditworthiness.   It’s a summary of your financial actions; this summary is given a score; this score is your credit score.    Having a good credit score is essential today because the financial industry uses your credit score to evaluate you; and their evaluations are non-negotiable.

Creditors, retailers, insurance companies, loan companies, landlords and even some utility companies use credit scores as a tool to determine whether or not to do business with you.   They will work with you if you have a good credit score because they feel that you are “credit worthy”.   If you have a bad credit score they can legally deny you credit and charge you the highest interest  rates.

If you want to pay the lowest prices and be charged the lowest interest rates you should find ways to improve your credit scores.   One of the ways to improve your credit score is to get to know what makes up your credit profile; and work on improvement.

Improve Credit Score

#1 – How Many Credit Cards Do You Have?

Improve your credit score by limiting the number of credit cards that you have.   You are judged by the number of credit cards you have.   Creditors love giving you credit cards; but evaluate you poorly when you have too many.

#2 – Watch Your Payment History

Your payment history is one of the most important factors making up your credit profile.   If you want to improve your credit score, improve your payment history.   Creditors assume that if you have a bad payment history they won’t get paid; they assume that history is a good indication of future behavior.   They don’t know you are trying to improve your credit score.

#3 – How Much Credit Is Available To You?

The amount of credit available to you vs the amount of credit you actually use is a part of your credit score.     To improve credit scores, only use 15% – 25% of your credit card limits.

Improve Credit Scores#4 – Do You Max-Out?

If you charge up to the full credit limits on your credit cards, creditors assume that you are in financial trouble, even if you aren’t.   So to improve credit score, only use 50% of your credit card limits.

#5 – Are You A Late Payer?

If you have made any payments 30 or 60 or 90 days late; creditors worry about you.   Improve your credit score by never paying late.   You are better off paying at least the minimum amount due vs paying late.

#6 – Bankruptcy

The harshest bite to your credit score comes from a bankruptcy.   Time heals all things so don’t despair, over time this too will improve; although it could take over 7 years.   A bankruptcy can also reduce your credit score by over 200 points.

#7 – Foreclosure

The second worst hit to your credit score is a foreclosure; it can also take over 7 years to come off your credit reports.   You can lose up to 150 points from your credit score due to a foreclosure.

#8 – Collection Accounts (Debt Settlement)

If your accounts go to collection, 100 to 150 points can get chopped off your credit score.

How much you pay for rent, your auto loan and your utilities is all determined by your credit score.  To help yourself keep more of your money in your pocket, do your very best to improve your credit score.