WHAT MAKES UP YOUR CREDIT SCORE?

When it comes to getting out of a rental, or getting a reasonable interest rate on a car loan, your credit is everything. Maybe your past has been less than perfect, but don't give up. I have seen / helped people with foreclosures, collections, bankruptcies, and judgements on their credit. It may take some effort, but I can get you there too. Below is some information regarding what makes up your credit score. Everyone is different, call or email me at any time and I work with your specific situation.

35% PAYMENT HISTORY

Keeping your payments on time make up the biggest part of your score. Have you had a late payment recently? That's okay, you got knocked down, get back up. The score will continue to bounce back as more time elapses from your last late.

30% AMOUNTS OWED

This is something many people don't pay attention to, but it is one of the most important. I have had clients that have never missed a payment but had a low fico score because their credit cards were over or at the limit. It is important to show the credit bureaus that you have credit, you are using it, but you're not abusing it. My advice is to keep a balance between $1 and 20% to 30% of the limit.

15% LENGTH OF CREDIT HISTORY

Many believe that paying off and closing an account will help your score. It actually will hurt you. Even if you are not using the account, keeping it open is a positive thing. Some of the best credit I have ever seen were from clients that had JC Penny or AMEX accounts open since the early 80's.

For younger people, I would open an account or two, the day you turn 18, you don't have to charge them up or even really use it. Be smart and you will not regret it when you go to make a larger purchase.

10% TYPES OF CREDIT USED

It is very very important to have a revolving account (credit card or line of credit). After bankruptcies, I will see many people only using cash, and I can certainly understand why. But again, you fell down, you have to get back up and show that you can manage your money and credit cards this time. I personally recommend that everyone has 2 revolving and 1 installment account.

10% NEW CREDIT OR INQUIRES

Opening a new account, or having your credit pulled can drop your score. Why? Because the bureaus are trying to prevent you from opening a bunch of new accounts and over extending yourself. However it is not as bad as many think, I typically see 3 to 15 point reductions with my clients. If you are shopping for a car, mortgage, or a credit card, it will bounce back in 3 to 6 months. Basically do not go getting your credit pulled every 3 months and you won't have to worry about this.

I hope this helped. Call/text/email at any time. I would be happy to help with your situation.

Sincerely, 

Nick Smith

801-661-4749

Nick.Smith@chl.cc