Secrets To Raising Your Credit Score [UPDATED]

Every day a person’s credit score become a little more important.
Financial institutions are not the only ones that use these scores anymore.
Employers and landlords are beginning to check these scores to determine the dependability of an individual.

A person’s credit score can range anywhere from 300 or less up to 800:

Financial institutions are probably the most well-known for using these scores.
They use them to decide whether or not to grant individuals:

Mortgage loans they will need to purchase a home
Automobile loans they will need to obtain reliable transportation to and from work
Credit cards they will need to build and keep their credit scores up

Every decision that you make regarding your credit score can have huge impacts on your life.
It can affect your finances and maybe even your future career.
Because of the major effects that your credit score can have on your life, it’s important that you consider the ways in which you can ensure that it stays up.

Here are the secrets to raising your credit score.

The truth of the matter is that your overall payment history comprises around 35% of your credit score.
This includes payments that you have made on credit cards, loan payments, retail stores, and any other type loan or credit line that you have obtained.
The FICO, or factor that determines your credit, is going to look at how much money you owed, how recent these transactions took place, and how late you were for each payment.
Being late once hurts your credit more than paying on time for two years straight.

The good news is that missing one simple payment won’t completely ruin your score.
However, if you miss more than one payment, you can find that your score is going to crumble quickly.
The best way to keep your credit score up is to ensure that you don’t get farther in debt than what you can pay back each month.

30% of your overall credit score is based off of how much you owe.
You want to ensure that the amount owed is not more than your available credit.
Credit scoring agencies are not typically going to only look at the total amount of debt carried by an individual.
The credit agency looks at how much of your overall available credit you have used.

If you have a lot of accounts that have outstanding balances, then you should realize this is a warning that your credit could be in jeopardy.

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Because of this, to raise your credit score, you should consider paying down outstanding balances.
This will allow the amount owed not to exceed the amount of credit that you have available.
You do not want to obtain more debt.
You should keep the amount of credit card debt you have low.

Around 15% of your total credit score comes from the amount of time that you have held your credit history.
The most important factor in determining the time is the age of the oldest account on your credit report.
The longer of a credit history that you have, the better the overall credit report.
You will also need to use at least some of these accounts on a regular basis.

You cannot magically make your credit history longer.
However, you can do some things to preserve the state of your current history.
If you are considering canceling your longest credit account to save your credit, reconsider.
Instead, you can transfer the balance of a newer card to the older account.
This will allow you to remove some debt and not impact your credit history because closing your oldest account could potentially harm your overall score.

10% of your overall credit score is going to come from the diversity of your credit.
If all debt is one particular type, such as credit cards, the score is not as strong as if you have a credit card, a mortgage, and an auto loan.
You should avoid opening new accounts to influence the diversity of your credit.
However, if you consider before opening lines of credit where your score will lie, then you have a better chance of diversifying your report and obtaining a higher credit history.

The last 10% of your score is going to come from how many accounts have recently been obtained.
This portion of your score considers any accounts that have been opened within the past year.
However, inquiries that loan companies have made into your score are going to remain on your credit history for two years.

If you want to keep your credit score up, do not apply for different types of credit in a short amount of time.
Instead, allow some time to pass between each application.
This can have a significant impact on your score.

Conclusion

Make sure that you follow these guidelines: