Credit Score Scale Suggestions – How to Evolve your FICO to the sky
Understanding your position on the credit score scale is very important before you apply for credit, buy a car or home, or purchase identity protection programs. Your credit standing can become very necessary, so keeping on top of what is in your credit report is the best way to safeguard it. Although the credit score scale ranges from 300 to 900, most companies and reporting agencies use a scale from 350 to 850, and it is uncommon to be at the extremes of the scale. Average to good credit falls between 600 and 700 on the credit score scale, and this is where most consumers score.
Where you are on the credit score scale is determined by five major elements. About 35% of your credit score is established by your past payment history. The time-frame of items on your credit report is in some cases more important than the item itself. A bankruptcy with good or better credit since filing, for example, will have less negative impact than recent late payments. Also, many people think that paying off credit cards that had recent late payments will improve their credit.
Payoffs like these will not generally affect payment history.
Around 30% of your credit score comes from your credit use. Your position on the credit score scale is better served by maintaining low balances on many cards than a high amount on only a few cards. The length of your credit history makes up 15% of your score.
The longer you have had open, positive individual accounts, the better it is for your credit rating. Closing seasoned, or mature, accounts and opening new ones can negatively affect where you are on the credit score scale. Approximately 10% of your credit score depends on the types of credit accounts you have open.
Your score will be affected more by bank loans and department store accounts than financed ones, like for a car loan. You can improve your standing on the credit score scale by getting bank loans instead of borrowing from finance companies. The last 10% of your score is made up of inquiries.
When shopping for a car or mortgage, multiple inquiries within a 14-day period will be considered a single inquiry, but other instances of many inquiries in a short time can pose a risk to your credit rating. The three major credit reporting agencies are Equifax, Experian, and TransUnion. They make monthly updates to your credit report based on information they receive about your credit and loan accounts and payment histories on those accounts. Each report affects where you are on the credit score scale.
Check out credit score scale for more great information on boosting your credit profile.
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