Improve Credit Score Part Three

July 28th, 2009

Length of Credit & how length of credit help improve Credit Score

The length of time you have established credit is important. This is referred to as length of credit. The sooner you get started building your credit, the longer you will have to create a high Credit Score. Get credit history started young. Buy things on your childrens’ credit so they have some established when then need it. In general, the longer your credit history is, the better your Credit Score. Credit bureaus generally don’t like new credit.

Types of Credit & how type of credit improve Credit Score

There are different types of credit. Mortgages are good (unless you have a lot of them). Some credit cards are good credit and some are not good credit.

Don’t open department store cards. If you have department stores cards, you may want to cancel them. Lowes and Home Depot are okay because they may be beneficial. However, do not cancel your department stores cards right before you are about to borrow from the banks.

If you only have department store cards, don’t cancel them because you need some form of credit history. Work on opening a new card (see possible good cards below) then cancel your department store cards.

New Credit & how new credit affect Credit Score

Getting new credit cards, cars, etc. can hurt your Credit Score because your credit is checked each time you apply for something new. Sometimes when your credit is checked it lowers your Credit Score by a few points.

Soft hit and hard hit credit pulls

There are hard-hit and soft-hit credit pulls. A hard-hit credit pull is not good. This is when you have a mortgage broker, car dealer, etc. pull your credit — it lowers your Credit Score every time you do. A soft-hit credit pull is okay. This is when you pull your own credit. You can do this as often as you’d like.