Repair Credit Score

Archive for the ‘Credit Score’ Category

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.

Amount you owe & how Amount you owe can improve your Credit Score

Amount you owe is the amount you currently owe for your credit cards, mortgage, car, etc. Amount you owe is on your credit history and Credit Report. This can be good or bad, depending on how much you owe compared to the limit you have.

It is best to not max out your credit cards. Your credit report is based on the amount you owe on your credit card compared to the credit limit.

For example, if your amount owed as a percentage of your credit limit is:

• 0-30%: This will improve your credit score
• 30-60%: This is ok for credit score
• 60-90%: This is not good for your credit score

Your credit score will be higher if you have a large line of credit and only owe 0-30% of the credit line available in your name.

Does having no debt improve credit score?

No. It is the ratio of credit line or credit limit and your debt that determines how good your credit score is. For example, it is better to have three credit cards of $10,000 credit limit and only owe $2,000 than having one card of $3,000 credit limit and owe $2,000.

Mortgages and credit score

Mortgages are on your credit report. If you have many loans you don’t want to continually go to the same bank. Your mortgage broker will help you (he gets paid if you get your loan). Be up front with your mortgage broker about your loans so he can shop at different banks. If he doesn’t know where your other loans are he might try to get you a loan at a bank where you already have a loan and they could deny you.