Credit is serious business and its tied into every aspect of life. Your credit is checked for everything these days. Car loans, rental property, even jobs now are running credit checks for employment eligibility. Improving your FICO score and fixing your overall credit is no easy task. Like losing weight, repairing your credit takes time. It took you a while to chunk on those pounds and itll take just as long, if not longer, to slim back to skinny. Debt works the same way. Nothing gets fixed overnight regardless of what most profit based companies advertise. Your credit score is determined by the following entities. Payment history = 35 percent Amounts owed = 30 percent Length of credit history = 15 percent New credit = 10 percent Types of credit = 10 percent Taking account of what really affects your credit, these get fix quick claims become just that- claims. The best advice is to manage credit responsibly over time. Following the order above, we can break down each entity of the credit score factors to help better assess how to really improve your credit and not get scammed into paying profiteers for promises that probably wont pan out perfectly. Ready? Get excited!!! Paying your bills on time accounts for 35 percent of your credit score! Delinquent payments and accounts with collection agencies can place a major negative impact on your credit rating. This step is crucial and requires a lot of attention and discipline on a monthly, consistent basis. Stay current. The longer you pay your bills on time the better your score will be. Amounts owed takes 30 percent, noting the second biggest factor in your credit rating. Keep your balances low. Just because a bank gave you a credit line of $5k doesnt mean you should spend $4,987.67 and pay the minimum monthlies. Balances exceeding 50 percent of your available credit per account can take your score down quickly. Dont rob Peter to pay Paul either. Moving debt around doesnt help your credit score. The length of your credit history takes third place in priority, accounting for 15 percent of your score. Dont try and open too many accounts at once in an effort to build credit. Newly opened accounts can lower your average account age and can greatly effect your score if you dont have a lot of other credit information. New credit takes 10 percent. When you decide to establish new credit, shop your rates and loan options within a controlled period of time. Completing loan and credit applications over weeks at a time can reflect poorly and drop your score. If youre shopping for deals, do it within a certain time frame and lock down your options, comparing rates and fees for services. Lastly, you need a little credit variety in life...just like a diet and dining. Apply for new credit accounts only as needed. Just to note: Getting the new xbox360 is not a need, says my wife. Opening new accounts and spending on them just to establish new credit doesnt raise your credit score. Paying timely on your installment loans and combined credit cards will raise your score over time coinciding with the above factors. A debt consolidation program allows consumers to pay back their debts at lower rates and with the convenience of one monthly payment. The reduced interest and stopping of late and past due fees allows the consumer to bring their balances down and creates a consecutive timely billing cycle with affordable payments. By improving payment history -35- and bringing balances down -30-, a debt consolidation program can greatly help you improve credit while getting out of debt. Debt consolidation / not debt settlements, write that down. Freedom Debt Management is a non-profit organization rated A+ by the BBB for budget counseling and debt consolidation services. For a free budget analysis, credit report review, or consolidation quote to get out of debt, visit our website and speak to a live credit counselor, complete our short application, or call one of our certified credit counselors at 800-905-1563.
Please Rate this Article 5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
